Question

A company calculates the following under a standard absorption costing system. (i) The sales volume margin variance (ii) The total fixed overhead variance (iii) The total variable overhead variance If a company changed to a standard marginal costing system, which variances could change in value? O (i) only O (ii) only - (i) and (ii) only ă…‡ (i), (ii) and (iii)

   A company calculates the following under a standard absorption costing system.
(i) The sales volume margin variance
(ii) The total fixed overhead variance
(iii) The total variable overhead variance
If a company changed to a standard marginal costing system, which variances could change in value?
O (i) only
O (ii) only
- (i) and (ii) only
ă…‡ (i), (ii) and (iii)
Show more…
ACCA FMA/FA Foundations in Accountancy-Management Accounting Interactive Text (Practice Revision Kit Not Included)
ACCA FMA/FA Foundations in Accountancy-Management Accounting Interactive Text (Practice Revision Kit Not Included)
BPP Learning Media 1st Edition
Chapter 14, Problem 21 ↓

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- Absorption costing includes both fixed and variable manufacturing costs in the cost of production and assigns a portion of fixed manufacturing overheads to each unit of product. - Marginal costing, also known as variable costing, includes only variable  Show more…

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A company calculates the following under a standard absorption costing system. (i) The sales volume margin variance (ii) The total fixed overhead variance (iii) The total variable overhead variance If a company changed to a standard marginal costing system, which variances could change in value? O (i) only O (ii) only - (i) and (ii) only ă…‡ (i), (ii) and (iii)
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