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Q. Information relating to a product is as follows:
Production 30,000 units
Sales price $40/Unit
Direct material $10/unit
Direct labour $8/unit variable production overheads $4/unit
Variable sales overheads $3/unit.Fixed Costs are:
Production overheads $60,000
Selling Cost $25,000
Administrative expenses $20,000.There is no opening stock for finished goods.
Assume that budgeted total fixed costs are equal to actual total fixed costs.
Calculate Profit under absorption costing and marginal costing if the actual result s are:
Production 31,000 units
Sales 25,000 units.Please do not simply type out a full question and expect to be provided with a full answer.
You must have an answer in the same book in which you found the question, and so ask about whatever it is in the answer that you are not clear about and then I will explain.
(I would also suggest that you watch my free lectures on absorption and marginal costing, because this is actually an easy question and is similar to the example that I work through in my lecture. The lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well.)
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