Absorption or marginal costing

I think you have mistyped the question, and that you meant to type "The business uses absorption costing" If so, then the answer is A With absorption costing, the variance is the units multiplied by the standard profit per unit. With marginal costing it is multiplied by the standard contribution per unit. The profit is contribution minus fixed overheads. So the contribution is always higher than the profit (unless there are no fixed overheads) and therefore the variance using contribution (marginal costing) will be higher than that using profit (absorption costing).