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Absorption and Marginal costing

SSneha5y ago
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?
John MoffatJohn MoffatTutor5y ago#1
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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