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Sir I don’t understand the precise reason that why marginal costing doesn’t have other fixed variances except for expenditure variance, I read a reason for this but still didn’t understand please Sir can you kindly explain in detail and the reason what I read was “fixed costs are not absorbed into product costs and so there are no fixed cost variances to explain any UNDER OR OVER ABSORPTION OF OVERHEADS”.
With absorption costing, because fixed overheads are absorbed into unit cost, the amount charged depends on the units produced. It is this that results in the over or under absorption.
For the full detail you need to watch the free lectures on marginal and absorption costing, and on variance analysis.
I cannot type out the whole lecture here.
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