ocr: Absorbtion Costing. Analysis By comparing the results betore the new investment (1995) with the torecast results after the new investment(199b), the management accountant would clearly be advising the Board of Directors to proceed with the capital expenditure program. The decision to expand operations would be chosen regardless of which costing method was used, as both the absorbtion and variable costing analysis graphs show: 800 768 700 628 600 535 500 450 488 400 365 300 200 100 1995 1996 1995 1996 1995 1996 Scenario 1 Scenario 2 Scenario 3 Expected Worst Best
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