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Absorption costing

This topic has 1 reply, 2 voices, and was last updated 5 years ago by John Moffat.

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May 29, 2020 at 6:41 am #572170
AverageAndy
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Sir when making the operating statement on absorption costing basis, then the budgeted profit figure that we start with, will only be net off sales minus Prime cost, variable and fixed production overheads only, right? The budgeted profit will not take into account fixed and variable non-production overheads, right?
May 29, 2020 at 9:13 am #572178
John Moffat
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Although we first do calculate the sales less the cost of goods sold (which includes all production costs), we then deduct all non-production cost from that figure to get the final budgeted profit.
Have you watched my free lectures on this?
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