Fixed overhead expenditure variance can be expressed as:
A) Actual fixed overhead - budget fixed overhead
B) Actual fixed overhead/budget fixed overhead
C) Actual fixed overhead x budget fixed overhead
D) Budget fixed overhead/actual fixed overhead

Question

Quizplus · Accepted Answer

Fixed overhead expenditure variance is the difference between the actual fixed overhead incurred and the budgeted fixed overhead. The formula to calculate this variance is Actual fixed overhead - budget fixed overhead, hence Option A is the correct choice. Option B shows the budgeted fixed overhead rate or budgeted fixed overhead cost as a percentage of the actual fixed overhead cost, which is not same as the variance. Option C and D do not make any sense in this context.

Fixed Overhead Expenditure Variance Can Be Expressed As