A company currently calculates its variances using a standard marginal costing. If the company were to change to a standard absorption costing system.. Thats the question
Sales volume variance changes and total fixed overhead variance also changes
can u explain me how total fixed overhead variance changes????
Ask the Tutor ACCA MA
Doubt
How do u calculate accounting rate of return???
11y ago#2If they use absorption costing there is a fixed overhead expenditure and a fixed overhead volume variance.
With marginal costing there is only the fixed overhead expenditure variance.
(The lectures on variance analysis explain the reasons in detail).
11y ago#3The accounting rate of return is the average profit per annum expressed as a percentage of the average investment.
thnks alot
11y ago#5You are welcome :-)
Sign in to reply to this topic.