Dear Sir,
could you help me to clarify the following please.
In this problem they give Fixed production overhead and in workings they are deducted from sales price to arrive at Standard profit margin. This figure is used to find variances. But I remember in some short exercises they used standard contribution. So, should we always deduct fixed overhead?
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Sales variancies -BLOCK CO (JUNE 2013 EXAM )
In Valet Co (JUNE 2014 exam)
Std. contribution us used rather than std profit...
9y ago#2It depends whether they are using marginal or absorption costing, which is clear from the wording of the question.
You must watch my free lectures - I am not going to simply type them all out here.
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