• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>

Can somebody help me? I'm stuck with this question.

Forums › FIA Forums › MA2 Managing Costs and Finance Forums › Can somebody help me? I'm stuck with this question.

  • This topic has 3 replies, 2 voices, and was last updated 5 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • August 7, 2019 at 5:28 pm #526595
    shin1001
    Member
    • Topics: 2
    • Replies: 1
    • ☆

    A business prepared the following budget for the year:
    sales $640,000
    direct costs $250,000
    overhead cost $330,000

    one-third of overhead costs are variable costs. Actual results for the year were to make and sell only 90% of the budgeted quantities. Sales revenue was $570,000 and costs were $565,000.
    what was the total cost variance (due to price and usage issues) for the year?
    A. $15,000 Adverse
    B. $21,000 Favourable
    C. $21,000 Adverse
    D. $15,000 Favourable

    August 7, 2019 at 5:39 pm #526598
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54696
    • ☆☆☆☆☆

    If 1/3 of the overheads are variable then the variable overheads were budgeted at $110,000 and the fixed overheads at $220,000.

    Because the production was only 90% of the budgeted quantities, the variable costs should only be 90% of the budgeted variable costs and should therefore be
    90% x (250,000 + 110,000) = $324,000.

    The fixed overheads should remain at $220,000 by definition.

    Therefore the total costs should be 324,000 + 220,000 = $544,000.

    The variance is the difference between this figure and the actual total cost of $565,000.

    August 7, 2019 at 7:06 pm #526608
    shin1001
    Member
    • Topics: 2
    • Replies: 1
    • ☆

    Thanks you so much sir!!!

    August 8, 2019 at 8:05 am #526643
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54696
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • The topic ‘Can somebody help me? I'm stuck with this question.’ is closed to new replies.

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • dkessilfie on FM Chapter 1 Questions – Financial management objectives
  • ahmadhoney on ACCA Advanced Audit and Assurance (AAA) The Audit Report 3: Types of Audit Report
  • Bimasha@123 on Discounted Cash Flow Techniques – ACCA Advanced Performance Management (APM)
  • Ken Garrett on Discounted Cash Flow Techniques – ACCA Advanced Performance Management (APM)
  • Bimasha@123 on Discounted Cash Flow Techniques – ACCA Advanced Performance Management (APM)

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in