Question

4) Which of the following is the correct mathematical expression to calculate the *fixed overhead spending variance*?

A) Static-budget amount — Flexible-budget amount
B) Flexible-budget amount — Actual costs incurred
C) Static-budget amount — Fixed overhead allocated for actual output
D) Flexible-budget amount — Fixed overhead allocated for actual output

Answer 1

The correct mathematical expression to calculate the fixed overhead spending variance is Option B) Flexible-budget amount — Actual costs incurred.

Step-by-step explanation:

The correct mathematical expression to calculate the fixed overhead spending variance is Option B) Flexible-budget amount — Actual costs incurred.

The fixed overhead spending variance measures the difference between the actual costs incurred and the costs expected based on the flexible budget. It helps identify whether the actual costs were higher or lower than anticipated. By subtracting the actual costs from the flexible budget amount, we can determine the variance.