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Absorption and Marginal costing

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Absorption and Marginal costing

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by John Moffat.
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  • December 24, 2020 at 6:42 pm #600827
    applessauce
    Member
    • Topics: 85
    • Replies: 65
    • ☆☆

    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?

    December 25, 2020 at 11:41 am #600846
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    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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