- This topic has 1 reply, 2 voices, and was last updated 9 years ago by .
Viewing 2 posts - 1 through 2 (of 2 total)
Viewing 2 posts - 1 through 2 (of 2 total)
- You must be logged in to reply to this topic.
OpenTuition recommends the new interactive BPP books for June 2024 exams, Get your discount code >>
Forums › ACCA Forums › ACCA MA Management Accounting Forums › Qn help
A company uses standard absorption costing. Its fixed overhead absorption rate is £8 per machine hr and each unit of production take 3 machine hrs.
Last year was an opening inventory of finished good of 4,000 units. They produced 30,000 units and sold 25,000. The actual profit last year was £526,000
What profit would have been earned under a standard marginal costing system?
Ans. supposed to be 406,000
I think it goes smth like this:
since produced>sold, then absorption costing profit would be more than marginal.
the difference would be 5000*8*3=120k.
then you deduct this 120k from 526k and come to 406k.