Misty Co’s budgetary control report for last month is as follows:
Fixed budget – 126,100 $
Flexed budget -130,855 $
Actual results – 133,580 $
What was the volume variance for last month?
A $4,755 (A)
B $2,725 (A)
C $4,755 (F)
D $2,725 (F)
Explanation: The expenditure variance is the difference between the flexed budget and the actual results. Expenditure variance = $130,855 – $133,580= $2,725 (A)
Why answer is D?
I think answer is C. Because fixed overhead expenditure variance is the difference between the budgeted fixed overhead expenditure and actual fixed overhead expenditure.
Thank you in advance for your help.
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MAExpenditure variance
10y ago#1In future please ask in the Ask the Tutor Forum if you wish for me to answer - this forum is for students to help each other.
Are you sure you have typed out the question and answer properly?
Because the question asks for the volume variance and the answer is explaining the expenditure variance. The correct expenditure variance is 133580 - 126100 = 7480 (A)
The volume variance is 4755 (F).
The total fixed overhead variance is 133580 - 130855 = 2725 (A)
(7480 (A) - 4755(F) = 2725 (A))
(Assuming obviously that the question is referring to fixed overhead variances)
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