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Eg. a company uses a standard marginal costing system.
If there is a question about std profit for actual sales, we don’t have to add the sale volume contribution.
If there is a question about budgeted profit, we have to add the sale volume contribution.
And also one more thing, whatever have we added to the fixed expenditure variance in these two situations?
Am I right? I watched your lectures but I am confused between these things.
Your first two sentences are correct subject to them referring to the sales volume variance!! (not sales volume contribution).
Whether we are using marginal costing or absorption costing, the final profit is after fixed overheads and so if fixed overhead expenditure is different from budget then so will the profit be different.
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