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June 10, 2020 at 11:11 am
I tried doing example 1 on my own before watching the lecture and did two separate versions – one with overheads and one without, as the text in the notes directly above the example shows you can calculate the CPU using marginal or absorption costing.
However, your answer appears to use only the absorption method and I am unsure what the reason for this is?
My first thought was that it may be because we are not told whether overheads are fixed or variable, and the default position with this lack of clarity would be to include overheads, but it would be great to have some clarification on this point.
John Moffat says
June 10, 2020 at 3:05 pm
In practice a company could use either marginal or absorption costing – it is up to them.
This simple introductory example is just to explain the basic idea. However in the exam all process questions with deal with all overheads in this way (which is assuming absorption costing or, of course assuming that all the overheads are variable).
August 1, 2019 at 7:08 am
Where can I find lecture on debit and credit and entries if you can suggest any
August 1, 2019 at 7:49 am
If you mean the debit and credit entries with regard to process costing, then they are all explained in the lectures that follow from this one.
If you mean debit and credit (i.e. double entry) in general then this is examined in Paper FA (not Paper MA) and is explained in full in the free Paper FA lectures.
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