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Forums › ACCA Forums › ACCA MA Management Accounting Forums › Flexible Budgets and Variances
The question goes like this..
You are provided a cost card
The Fixed Overheard per unit = $2
The Fixed overhead charged to each unit of the product is based on a monthly production level for product A of 500 units
Last period actual level of activity was 750 units and the fixed overhead was $1700
The question is to find the total fixed expenditure variance.
If anyone knows the answer, please post the rationale too.
Thanks
budgeted fixed overhead=2*500=1000
actual fixed overhead=1700
expenditure variance=700 adverse.
you should not find fixed overhead of 750 units for expenditure variance.