CIPS L6M9 Exam - Topic 1 Question 21 Discussion

Actual exam question for CIPS's L6M9 exam

Question #: 21
Topic #: 1

[All L6M9 Questions]

Andrea is the Chief Financial Officer at Big Corporation and is completing a Variance Analysis. She has reviewed the production costs of creating item B, and this month's costs show a variance to budget of -200. What does this mean?

AMore money was spent than expected

BLess money was spent than expected

CThe organisation has lost 200

DThe organisation has gained 200

Show Suggested Answer

Suggested Answer: B

A negative variance to budget means that the company spent 200 less than expected, which is a positive outcome. While it may seem counterintuitive, a negative variance in this context indicates cost savings rather than overspending. Option D is incorrect because the organisation has saved 200, not gained it. (See p.198)

by Wilda at Apr 11, 2026, 03:18 PM

Limited Time Offer

25%

Off

Get Premium L6M9 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Denise

1 day ago

I think a negative variance means that costs were higher than budgeted, so I’m leaning towards option A.

upvoted 0 times

...