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Absorption & Marginal Costing

Forums › ACCA Forums › ACCA MA Management Accounting Forums › Absorption & Marginal Costing

  • This topic has 3 replies, 2 voices, and was last updated 2 months ago by mrjonbain.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • April 4, 2022 at 1:25 pm #652703
    sarbrina
    • Topics: 21
    • Replies: 48
    • ☆☆

    Hi Mr. Maffot

    I’m finding it difficult to arrive at the answer for this question. I understand the fact that production is higher than sales for Month 1, so therefore absorption costing will be higher and vise versa for Month 2.
    The correct answer is C. I don’t understand how they got those figures. Please explain this to me.

    A company manufactures and sells a single product. In two consecutive months the following levels of production and

    sales (in units) occurred:
    Month 1 Month 2
    Sales 3,800 4,400
    Production 3,900 4,200

    The opening inventory for Month 1 was 400 units. Profits or losses have been calculated for each month using both
    absorption and marginal costing principles.

    Which of the following combination of profits and losses for the two months is consistent with the above data?

    Absorption costing profit/(loss) Marginal costing profit/(loss)

    Month 1 Month 2 Month 1 Month 2
    $ $ $ $
    A 200 4,400 (400) 3,200
    B (400) 4,400 200 3,200
    C 200 3,200 (400) 4,400
    D (400) 3,200 200 4,400

    April 4, 2022 at 3:11 pm #652707
    mrjonbain
    Moderator
    • Topics: 1
    • Replies: 1216
    • ☆☆☆☆☆

    If you want to ask the tutor something directly please use the ask the tutor forum. This forum is primarily designed for students to help one another. The tutors do often check the other forums but you are more likely to get prompt and relevant reply if you want tutor to answer by using relevant ask the tutor forum.

    https://opentuition.com/forum/ask-acca-tutor-forums/ask-the-tutor-acca-ma/

    Hope this helps.

    April 4, 2022 at 10:04 pm #652717
    sarbrina
    • Topics: 21
    • Replies: 48
    • ☆☆

    Noted. Thanks

    April 5, 2022 at 10:07 am #652731
    mrjonbain
    Moderator
    • Topics: 1
    • Replies: 1216
    • ☆☆☆☆☆

    You are welcome.

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • The topic ‘Absorption & Marginal Costing’ is closed to new replies.

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