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When producing the operating statement under absorption costing, will we take fixed overhead capacity, fixed overhead total and fixed overhead efficiency variances into account or not, because the proforma for the operating statement given in the BPP book only accounts for fixed overhead expenditure and fixed overhead volume variance.
You cannot he asked to prepare a full operating statement in the exam. You are expected to know what it is, and you an be asked to fill in some of the variances in it. As a result it will be clear from the other question whether they just want the volume variance or whether they want you to analyze it between the volume and capacity variances.
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