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A company incurred the following actual production costs at output of 25,600 units in a period
$
Prime costs
96,470
Overheads
79,750
Budgeted production costs for an output of 24,000 units were:
Prime costs
$3.70 per unit
$57,600 fixed costs plus $0.90 per unit variable costs
Overheads
What was the total cost variance in the period comparing actual costs with the flexed budget?
$860 Adverse
$8,220 Adverse
$860 Favourable
$8,220 Favourable
Firstly I’m confused where did we study cost variance in Fma syllabus, secondly i tried applying the formula that would give me 96470-88800= 7670, can you please help me out how to calculate total cost variance?
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