no, because when total factory cost increases: the conversion cost per hour increases(cost per factory hour);since TA ratio = Contribution (sales less material cost only) per hour/Conversion cost per hour (or cost per factory hour) .The impact would be reducing of TPAR
No. The marginal costing profit will be higher as there is a decrease in inventory levels so more fixed overheads r carried forward and matched against sale when they r sold resulting in lower absorption costing profit. Cl Inventory decreases, cost of sale increases and so profit decreases for absorption costing.
Hi, in question 4, according to the equation, increase total factory cost should lower its ratio right?
no, because when total factory cost increases: the conversion cost per hour increases(cost per factory hour);since TA ratio = Contribution (sales less material cost only) per hour/Conversion cost per hour (or cost per factory hour) .The impact would be reducing of TPAR
Hi – yes – Im sorry – you are correct Q2 should be answer d) Alpha, Gamma, Beta.
Ill get this changed asap.
I think the answer given is wrong the correct answer should be alpha gamma and betta
I mean for question nunumb 2
No. The marginal costing profit will be higher as there is a decrease in inventory levels so more fixed overheads r carried forward and matched against sale when they r sold resulting in lower absorption costing profit. Cl Inventory decreases, cost of sale increases and so profit decreases for absorption costing.