- This topic has 4 replies, 2 voices, and was last updated 4 years ago by
.
- Posts
For service industry, do we assume that we use marginal costing for service industry standard costing?
For example, Selling price – Total variable cost, to get Std contribution margin?Sir, if for production industry,
if question didnt say company using absorption and marginal costing, do we assume company using marginal costing?
I find it difficult to determine between this both treatment.sir, for fixed production volume variance, is it the sum of (fixed production capacity and fixed prodcution efficiecny variance?
Thank You Sir.sir, for calculating standard profit
we only calculating
std SP- All the production cost,but we dont take into account the non production cost
am i right sir?
Whatever the type of business it is up to the individual company to decide what method of costing to use – there are no laws about it for management accounting. Service industries would be more likely to use marginal costing.
All questions will make it clear in one way or another whether the business is using marginal or absorption costing. If you are puzzled about a specific question then say which question (provided it is either a past exam question or a question in the current edition of the BPP Revision Kit).
The fixed overhead volume variance is indeed the total of the capacity and efficiency variances as I explain in my free lectures. However this is very unlikely to be relevant for Paper PM because it is examined in Paper MA (was F2). Variance questions in Paper PM are mostly concerned with planning and operational variances, or with mix and yield variances.
The lectures are a complete free course for Paper PM and cover everything needed to be able to pass the exam well.
Tq Sir John, but you havent answer my question of this 🙁
sir, for calculating standard profit
we only calculating
std SP- All the production cost,but we dont take into account the non production cost
am i right sir?
- You must be logged in to reply to this topic.