Thank you very much for your lecture. I don’t understand how you don’t have to add the cost of producing an additional 2000 which are not sold? Isn’t that considered 2000 X the amount it cost to produce them? Looking forward to your answer. many Thanks Eli

We only subtract the cost of items that are sold. The goods left in inventory are sold in the following period and so are charged in the following period.

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tmddnjstj52 says

hi, firstly thanks for your lecture

I assume that you subtracted closing inventory (50,000) for the February one as well. Can you explain why?

tmddnjstj52 says

sorry, i was confused with other stuff. figured it on my own!

thanks for your great lecture again!

John Moffat says

Glad you figured it out, and than you for your comment 🙂

kartik123456 says

Hello,

Can you explain the reason why absorption costing gives higher profit than marginal costing when inventory increases and vice versa.

John Moffat says

But I explain this in the lectures!!

John Moffat says

I don’t write ‘cess’ 🙂

‘Less’ means subtract.

E4688956Y says

Thank you very much for your lecture. I don’t understand how you don’t have to add the cost of producing an additional 2000 which are not sold? Isn’t that considered 2000 X the amount it cost to produce them? Looking forward to your answer. many Thanks Eli

John Moffat says

We only subtract the cost of items that are sold. The goods left in inventory are sold in the following period and so are charged in the following period.

Sumin says

Thank you for great lecture! I am sorry but I don’t know what less or cess is. Whenever you track back, you write ‘less or cess’.