CAF-5 · Chapter 11 · Question 6 of 10
When preparing an operating statement to reconcile budgeted profit with actual profit under a standard marginal costing system, how must the sales volume variance be valued?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) At standard contribution margin per unit
Explanation
Under a standard marginal costing system, fixed costs are treated as a period expense and are not absorbed into unit costs. Therefore, the sales volume variance is calculated using the standard contribution margin per unit, rather than the standard profit per unit used in absorption costing.
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