hi, i have some question that i don't answer it.
A manufacturing company makes one product which uses 2kg of raw material per unit of product, at a cost of $3.80 per kg. Each unit of the product requires 2.5 hours of labour, which is paid at $7.80 per hour.The company incurs fixed production costs of $6,000 per month, and the factory produces 2,000 units of the product each month. There is no inventory of the product at 1june 20X3 but only 1,600 units of the product were sold in June.
- What is the closing inventory valuation at 30 June 20X3 under absorption costing?
A $10,840
B $12,040
C $12,340
D $48,160
- What is the closing inventory valuation at 30 June 20X3 under marginal costing?
A $10,840
B $12,040
C $43,360
D $54,200
FIA Forums
Absorption costing and marginal costing
11y ago#1MC/unit = 2 x 3.8 + 2.5 x 7.80 = 27.1
Closing inventory at MC = 400 units @ 27.1 = 10,840
TAC/unit = 27.1 (above) + 6000/2000 = 30.1
Closing inventory at TAC = 400 x 30.1 = 12,040
absorption costing and marginal costing have any different?
11y ago#3Yes - otherwise the answers would be the same.
Absorption costing adds in a fair share of fixed production overheads; marginal costing takes only marginal costs into account.
See Chapter 5 of the MA1 notes.
ok, thank you...
Hi!please help me ..i have a question here:
At the beginning of the year,Silvia planned to manufacture 30 000 bottles of drink at its yard.the expected fixed production overhead was $15 000..
(a)calculate the under/over absorption of fixed overheads during the year
(b)quantify how much of (a) was:caused by difference between actual and budgeted fixed cost and (¡¡)due to the difference between actual and budgeted output
10y ago#6You need more information to be able to answer this: actual units produced and actual fixed overheads.
25,000 units of a company’s single product are produced in a period during which 28,000 units are sold. Opening
inventory was 7,000 units. Unit costs of the product are:
$ per unit
Direct costs 16·20
Fixed production overhead 7·60
Fixed non-production overhead 2·90
What is the difference in profit between absorption and marginal costing?
10y ago#10@Eric
Inventory has fallen by 3000 (28,000 - 25,000). Under TAC a fall inventory reduces profits compared to MC (less fixed costs carried forward in closing stock).
Therefore profit difference = 3,000 x 7.60 = 22,800.
(Fixed non-production overhead should not be included in stock values under TAC so is irrelevant).
There was no work-in-progress in a manufacturing process at the start of a period. 18,000 units of a product
commenced processing in the period during which completed output was 16,100 units. The work-in-progress was
75% complete for conversion costs which were $4·60 per equivalent unit. There were no losses or gains in the
process
What amount was included in the closing work-in-progress for conversion costs?
A $6,555
B $8,740
C $11,653
D $18,515
Good day,
Please explain the following:
Product X requires 1·8 kg of a raw material per finished unit. The material has a weight loss of 10% in preparation
for manufacture. Inventory of the material is currently 420 kg but needs to be increased to 500 kg. 2,000 units of
Product X are to be manufactured.
How many kg of the raw material need to be purchased to satisfy the above requirements?
A 3,880
B 3,920
C 4,040
D 4,080
A manufacturer absorbs production overheads into the cost of jobs as a percentage of actual direct labour cost. Two
jobs were worked on during a period:
Job 1 ($) Job 2 ($)
Opening work-in-progress 5,269 –
Direct materials in the period 10,726 4,652
Direct labour in the period 4,360 2,940
Production overheads of $9,855 were incurred in the period. Job 2 was completed in the period.
What is the value of work in progress at the end of the period?
A $20,972
B $24,941
C $26,241
D $20,355
how to get the relevant material and practice to be check that concepts regarding the said topics are clear and i can pass the exams
Hameed2105, welcome to the Opentuition forums. You should be able to buy a revision kit from BPP for this subject. You can obtain a twenty percent discount with an appropriate code from this website for this purchase-
https://opentuition.com/20-discount-bpp-books/
Hope this helps.
3y ago#16Thanks, mrjonbain
No problem. You are welcome.
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