In lecture of basic variance. You said that Fixed OH will be not taken as budget in flexed budget instead FOAR x Flexed units in absorption costing.
Can you tell me that same drill will be carried in marginal costing or no?
For example
Fixed budget has fixed cost of 24000 and units 2400. We are finding fixed OH for 2000 units (flexed budget).
Fixed OH in Absorption costing= 20000
Fixed OH in Marginal costing =24000
Am I correct?
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Variance Analysis
3y ago#1Yes. With marginal costing we do not absorb the overheads and the only variance is the expenditure variance which is the difference between the budgeted total fixed overheads and the actual total fixed overheads. (And I do actually explain that in my free lectures).
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