An organisation uses standard marginal costing. The actual cost of fixed production overheads in 20X5 was 5% less than the budgeted fixed production overheads for the same period. The favourable fixed production overhead expenditure variance in 20X5 was $3,120.
What was the actual fixed production overhead in 20X5?
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Fixed production overheads
9y ago#1Please do not set test questions. You must have an answer in the same book in which you found the question and so you should ask about what it is in the answer that you do not understand.
Given that the actual cost is 5% less than the budget figure, then the variance of 3,120 must be 5% of the budget figure.
So you can then calculate the budget figure, and the actual total is 3,120 less than the budget figure.
Oh sorry!
may I ask how I can calculate budget figure in this case
thank you
9y ago#3If 3,120 = budget x 5%, then budget = 3,120 / 5% !!!
thank you
9y ago#5You are welcome :-)
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