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Absorption and Marginal costin

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Absorption and Marginal costin

  • This topic has 1 reply, 2 voices, and was last updated 9 months ago by John Moffat.
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  • October 29, 2021 at 6:06 pm #639403
    SarahSyed
    • Topics: 10
    • Replies: 1
    • ☆

    The relevance of Absorptional costing & Marginal costing with variances is that:

    1) In marginal costing we need to calculate only one fixed overhead variance which is also called expenditure variance and it is calculated as such:

    Fixed overhead expenditure variance is the difference between what was actually spent and what was budgeted to be spent.

    2) In absorptional costing we need to calculate all fixed overhead variances such as Fixed overhead Expenditure / Volume / Capacity / Efficiency variances.

    October 30, 2021 at 5:57 am #639419
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 49993
    • ☆☆☆☆☆

    Correct. (And of the course the sales volume variance is different depending on whether it is absorption or marginal costing).

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