Traditional Costing Methods – CIMA P1
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I did not think the overhead absorption rate would be used for marginal costing. Why are we using it?
No worries. I was able to figure it out. Fixed costs are not stated as a round figure but per unit based on production!
Initially, I had thought that the 12000 were the number of units the AR was calculated based upon.
where is the closing inventory of 1500coming from
That’s the difference between the amount produced and the amount sold-13,500 units were produced but 12,000 units sold-the difference between the 2 is 1,500
Can you advise which syllabus this is please.
Thanks.
Hi, please can you help me with this query.
Regarding the below formula, I thought MC don’t include fixed overheads? In that case why are we adding it to opening inventory?
AC Profit
add: fixed overhead in opening inventory
less: fixed overhead in closing inventory
MC profit