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Sales variancies -BLOCK CO (JUNE 2013 EXAM )

This topic has 2 replies, 2 voices, and was last updated 9 years ago by John Moffat.

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February 4, 2017 at 7:15 pm #371068
mika84
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Dear Sir,
could you help me to clarify the following please.
In this problem they give Fixed production overhead and in workings they are deducted from sales price to arrive at Standard profit margin. This figure is used to find variances. But I remember in some short exercises they used standard contribution. So, should we always deduct fixed overhead?
February 5, 2017 at 1:22 am #371082
mika84
Member
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In Valet Co (JUNE 2014 exam)
Std. contribution us used rather than std profit…
February 5, 2017 at 9:06 am #371117
John Moffat
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It depends whether they are using marginal or absorption costing, which is clear from the wording of the question.
You must watch my free lectures – I am not going to simply type them all out here.
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