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25,000 units of a company’s single product are produced in a period during which 28,000 units are sold. Opening inventory was 7,000 units. Unit costs of the product are:
$ per unit
Direct costs
16.20
Fixed production overhead
7.60
Fixed non-production overhead
2.90
What is the difference in profit between absorption and marginal costing?As you will know from the lectures, the only difference in the profits is due to the increase/decrease in inventory x the fixed production costs per unit.
Here they sell 3000 units more than the produce, so the inventory will fall by 3000 units.
So the difference in profits is 3000 x 7.60 = 22,800
Could you supply me with some fia ma1
Extra questions apart from specimen paper and practice tests
Like Some extra questions to practice
Please do help me
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