- This topic has 1 reply, 2 voices, and was last updated 5 months ago by
John Moffat.
John Moffat.-
Posts
-
laraib.abro
- Topics: 11
- Replies: 3
- ☆
Firm recorded profit of 50000 under marginal costing when inventory increased from 1000 units at start of period to 1400 units at end of period .
Under absorption costing fixed production absorption rate 12 per unit .What would be profit under absorption costing ?
John Moffat
- Topics: 57
- Replies: 49598
- ☆☆☆☆☆
Again, why are you attempting a question for which you do not have an answer?
As is explained in my free lectures, the difference between the absorption and marginal profit is always only ever the change in inventory over the period multiplied by the fixed production cost per unit.
Here the inventory increased by 400 units. The absorption rate is $12 per unit. Therefore the profit will be different by $4,800.
I do suggest that you watch my free lectures. They are a complete free course for Paper MA and cover everything needed to be able to pass the exam well.
laraib.abro
John Moffat- You must be logged in to reply to this topic.