A favourable fixed overhead flexible-budget variance indicates that actual fixed costs exceeded the lump-sum amount budgeted.

Question

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A favourable fixed overhead flexible-budget variance occurs when actual fixed costs are lower than the lump-sum amount budgeted. This indicates that the company has saved money on fixed costs, which can be a good thing for their overall profitability. If actual fixed costs exceeded the budgeted amount, this would result in an unfavorable flexible-budget variance.

A Favourable Fixed Overhead Flexible-Budget Variance Indicates That Actual Fixed