is fixed production overhead expenditure and fixed production overhead volume part of the costs of goods sold? so I know when I do the exam if I need to add or minus (due to the variances) from a budgeted gross profit.
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Gross profit
6y ago#1You add or subtract depending on whether the variances are favourable or adverse.
This is all explained in my free lectures on variance analysis.
so if I have a budgeted gross profit of 10,000 and I have fixed production overhead expenditure of 2000 favourable and fixed production overhead volume of 1500 adverse. how would I calculate this. would this be included to calculate gross profit or net profit?
6y ago#3You add the favourable variance and subtract the adverse variance.
It would give the gross profit since the are production overheads.
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