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John Moffat.
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zainrajput
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budgeted production units 13000
actual prod units 12000
actual sales 11500
profit under marginal costing 80000
foar 6
what is the profit under absorption costing?my answer is 12000-11500=500×6=3000
3000+80000=83000
but i am confused in the point that is inventory levels increasing or decreasing?
the actual prod units were 12000 and sales were 11500 so is the remaining 500 increase the inventory or decrease it? also did i calculate it the right way?
John Moffat
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In future you must ask in the Ask the Tutor Forum if you want me to answer – this forum is for students to help each other.
If a business produces more than they sell, then the difference must be increasing the inventory.
Therefore your answer of 83,000 is correct.
zainrajput
- Topics: 7
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thankyou 🙂
John Moffat
- Topics: 57
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You are welcome.
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