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Accounting for Marginal and Absorption costing

Forums › CIMA Forums › Accounting for Marginal and Absorption costing

  • This topic has 1 reply, 2 voices, and was last updated 2 years ago by Kim Smith.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • July 1, 2018 at 10:30 am #460657
    nazbee
    • Topics: 8
    • Replies: 3
    • ☆

    Dear Sir,

    Please help me with the following question, i can’t get the answer.

    Ques:
    $ per unit
    Direct materials 8.00
    Direct labour 8.50
    Variable overhead 3.50
    Fixed overhead absorption rate 4.00

    Profit 11:00
    Selling price 35:00

    Information at the month end;
    units
    Budgeted production for the month 4000
    Actual production for the month 6,500
    Actual sales for the month 8,100

    Fixed overhead costs $30,000

    All other unit costs and revenues were as budgeted.

    Find the marginal costing profit and absorption costing profit for the month.

    July 2, 2018 at 4:38 pm #460745
    Kim Smith
    Keymaster
    • Topics: 39
    • Replies: 3563
    • ☆☆☆☆☆

    Do you mean that fixed overhead per UNIT is 4.00? If not, and 4.00 is an absorption RATE per hour (for example) you need to specify how many hours direct labour each unit requires.

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