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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?

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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

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Cherilyn
18 days ago
Definitely means they spent more than planned.
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Leatha
23 days ago
That's a negative variance, so A is correct.
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Vince
1 month 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.
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Jamal
1 month 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?
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Tawna
2 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.
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Denise
2 months ago
I think a negative variance means that costs were higher than budgeted, so I’m leaning towards option A.
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