CIMA BA2 · Chapter 7 · Question 7 of 14
Budgeted fixed production overheads for a period were $120,000. Actual fixed production overheads were $126,500. What is the fixed overhead EXPENDITURE variance?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) $6,500 adverse
Explanation
The fixed overhead expenditure variance is the difference between budgeted and actual fixed overhead expenditure: $126,500 - $120,000 = $6,500. It is adverse because actual spending exceeded the budget.
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