• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>

marginal & absorptional costings

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › marginal & absorptional costings

  • This topic has 6 replies, 2 voices, and was last updated 3 years ago by John Moffat.
Viewing 7 posts - 1 through 7 (of 7 total)
  • Author
    Posts
  • October 15, 2021 at 8:49 pm #637779
    Natasha1996
    Participant
    • Topics: 41
    • Replies: 25
    • ☆☆

    Which variance is affected by the marginal & absorptional costings?
    And where do the changes due to these costing principles happen in the variance calculation?

    October 16, 2021 at 9:58 am #637801
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    The sales volume variance is different, and the fixed overhead volume variance only exists when using absorption costing.

    This is all explained in my free lectures on basic variance analysis (although as I explain in the lectures, they are very rarely relevant for Paper PM because they are revision from Paper MA. Paper PM concentrates on the advanced variances – planning and operational, and mix and yield.)

    October 18, 2021 at 7:54 pm #638365
    Natasha1996
    Participant
    • Topics: 41
    • Replies: 25
    • ☆☆

    You did mean to say that whether we use absorptional or marginal costing the two variances will be affected and therefore we need to adjust as follows:

    In Absorptional costing we use Profit per unit;
    In Marginal costing we use Contribution per unit;

    [Sales volume and Fixed Overhead Volume variance will need to be adjusted; No other variances will need adjustment]

    All correct?

    October 19, 2021 at 7:24 am #638416
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    Correct.

    October 25, 2021 at 6:48 pm #639094
    Natasha1996
    Participant
    • Topics: 41
    • Replies: 25
    • ☆☆

    Sir, I need correction about the last line of my previous question I asked you regarding we have to adjust Std Profit and Std Contribution in these two variances or not which are Sales Volume and Fixed Overhead Volume variances.

    I saw your notes where you didn’t use Std Profit/contribution rather you used Fixed Overhead cost/hour to calculate Fixed Overhead Volume variance.

    Please say again that only the sales volume variance will need to be adjusted for absorptional and marginal costing (Std Profit or Std Contribution respectively)

    Please correct me.

    October 26, 2021 at 10:13 am #639135
    Natasha1996
    Participant
    • Topics: 41
    • Replies: 25
    • ☆☆

    Sir, please correct my last response.

    And Thanks for answering me all the time (you are the BEST :))

    October 26, 2021 at 2:48 pm #639148
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    The sales volume variance is as you state.

    The fixed overhead volume variance only exists with absorption costing. It does not exist with marginal costing.

  • Author
    Posts
Viewing 7 posts - 1 through 7 (of 7 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • Sefater on Chapter 3 – Property Income and Investments – Individuals TX-UK FA2023
  • adityachaudhry on Discounted cash flow techniques (part 3) – ACCA (AFM) lectures
  • nuripamir on ACCA Administrative Review
  • Jherddie on CIMA E3 Chapter 8 Test
  • umangkumbhat on What is Assurance? – ACCA Audit and Assurance (AA)

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in