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Question:
A company operates a standard marginal costing sustem. Last month actual fixed overhead expenditure was 2%below budget and fixed overhead expenditure variance was $1250.
What was the actual fixed overhead expenditure for last month?
Sir please explain $61250 as answer to this question.If the expenditure was 2% below budget, then the variance of 1250 must equal 2% of the budget.
Therefore the budget is 1250/2% = $62,500.The actual expenditure is 2% below budget and is therefore 62,500 – 1,250 = 61,250.
Why did you not watch the free lectures on variances before attempting questions? !!
Thanks alot sir!
Yes Sir, I did watch the lectures. But while solving I got a bit confused.
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