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In every variance reporting system with a flexible budget that comares budgeted and actual profit there must be a sale volume variance.
TRUE OF FALSE
IN MARGINAL COSTING THERE IS NO SALE VOLUME VARIANCE
in the bpp revision kit its trueUnless they have made a typing mistake (which I doubt) I would expect that they are referring to the fixed overhead volume variance. As you will know from my free lectures, with absorption costing there is a fixed overhead volume variance, but not with marginal costing.
There is always a sales volume variance whether it is absorption or marginal costing – assuming of course that the actual sales are different from the budgeted sales!
If you tell me which question it is in the BPP revision kit, then I will check.
You must be using an old edition of the Revision Kit, because in the current edition question number 150 is on page 43 and is about learning curves 🙂
However, what I wrote in my previous reply is the position. With marginal costing there will be a sales volume variance, but there will not be a fixed overhead volume variance (as there will be with absorption costing).
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