Deal of The Day! Hurry Up, Grab the Special Discount - Save 25% - Ends In 00:00:00 Coupon code: SAVE25
Welcome to Pass4Success

- Free Preparation Discussions
Mail Us support@pass4success.com
Location US
Mob_nav_barsMENU

CIPS L6M9 Exam - Topic 1 Question 21 Discussion

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?
B) Less money was spent than expected
A) More money was spent than expected
C) The organisation has lost 200
D) The organisation has gained 200

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?

Show Suggested Answer Hide 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:

0/2000 characters
Submit Cancel
Kallie
9 hours ago
That's a negative variance, so more money was spent than expected.
upvoted 0 times
...
Wava
6 days ago
I agree, A makes the most sense here.
upvoted 0 times
...
Laurena
11 days ago
I thought variances were always good news, this sounds bad.
upvoted 0 times
...
Noah
16 days ago
Wait, how can they lose 200 if it's just a variance?
upvoted 0 times
...
Cherilyn
2 months ago
Definitely means they spent more than planned.
upvoted 0 times
...
Leatha
2 months ago
That's a negative variance, so A is correct.
upvoted 0 times
...
Vince
3 months ago
I feel like I’ve seen this before in class, and I think a negative variance usually means less money spent, so I might go with B.
upvoted 0 times
...
Jamal
3 months ago
I’m a bit confused because -200 could also imply savings, but I think it’s more about spending more than expected, so maybe A or C?
upvoted 0 times
...
Tawna
3 months ago
I remember practicing a similar question where a negative variance indicated overspending, but I’m not completely sure if that applies here too.
upvoted 0 times
...
Denise
3 months ago
I think a negative variance means that costs were higher than budgeted, so I’m leaning towards option A.
upvoted 0 times
...

Save Cancel