Skip to content

Ask the Tutor ACCA MA

fixed overheads variance

Former userFormer user8y ago

[Content removed at user request]

John MoffatJohn MoffatTutor8y ago#1
Yes - fixed costs do remain constant. However if we are using absorption costing, then using a standard profit per unit effectively treats the fixed overheads as though they are variable. That is why we have a fixed overhead volume variance. The reason I flex the budget in my lecture on variances is to explain why this volume variance arises.
Sign into reply to this topic.