Sir I found a question in the study text and I am confused by this
It gave the format for the absorption costing statement and I needed to find the under/over absorption of overheads
When I was trying to find it I noticed that they haven't used he correct equation I think and have used actual fixed production costs-standard fixed production costs
I thought that when finding overhead costs that we need to deduct standard fixed production overhead cost from actual fixed production costs
Sir this was the data that was given
$
Fixed production overhead. 5
The fixed production overhead figure has been calculated on the basis of a budgeted normal output of 36000 units per annum. The fixed production overhead incurred in March was $15,000
No of units produced
Produced 2000 units
Sir in this question did they use
Standard fixed production overhead cost- Budgeted fixed production overhead cost because they haven't given the actual figures
Is that the reason they have calculate under absorption like this?
Ask the Tutor ACCA MA
Absorption and Marginal costing
I don't think you have typed out the whole question.
The actual overheads are $15,000 but there is not the information to calculate the absorption rate.
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