Intermediate: Comparison of absorption and marginal costing variances You have been provided with the following data for S pic for September:

Explain ‘activity-based costing’ and how it may provide useful information to managers.
(Your answer should refer to both the setting of cost driver rates and subsequent overhead cost control.)

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Accounting method: Absorption Marginal Variances: () () Selling price 1900 (A) 1900 (A) Sales volume 4500 (A) 7500 (A) Fixed overhead expenditure 2500 (F) 2500 (F) Fixed overhead volume 1800 (A) n/a During September production and sales volumes were as follows: Sales Production Budget 10 000 10000 Actual 9 500 9700