The budget statement produced below is based on the marginal costing system. Given this information please discuss how it may be more appropriate for planned revenues and costs to be set and monitored on an absorption cost basis?

Production Statement for Period 8: Product ZB6 Std cost Original Flexed Actual Overall Activity Spend Per unit Budget Budget Result Variance Variance Variance (750 units) (770 units) (770 units) E f E f f fav/adv f adv/fav E adv/fav Selling price 150 112,500 115,500 118,800 (6,300) (F) (3,000) (F) (3,300) (F) Direct 6 4,500 4,620 5,300 (800) (A) (120) (A) (680) (A) materials Direct 22.50 16,875 17,325 15,600 1,275 (F) (450) (A) 1,725 (F) labour Variable 4 3,000 3,080 2,700 300 (F) (80) (A) 380 (F) machine costs Variable 32.50 24,375 25,025 23,600 775 (F) (650) (A) 1,425 (F) costs Contribution 117.50 88,125 90,475 95,200 (7,075) (F) (2,350) (F) (4,725) (F) Fixed 30 22,500 23,100 26,000 (3,500) (A) (600) (A) (2,900) (A) Overheads Operating 87.50 65,625 67,375 69,200 (3,575) (F) (1,750) (F) (1,825) (F) profit