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If in a question i have been given:
Prime Costs $90
variable Production Overhead $6
fixed Production Overhead $3
distribution Overhead $4WHAT WILL BE THE CLOSING INVENTORY VALUE PER UNIT WILL BE UNDER TRADITIONAL ABSORPTION COSTING? $99 or $103
Hi there – this is a bit of an unclear question and definitely not a CIMA standard one.
I assume you are ultimately asking whether distribution costs are added to the absorption product cost – the answer is no.
Therefore closing stock will be valued at $99 pu assuming no opening stock or any other such adjustments etc
Thanks
.Please help me with the following task:
a company absorbs overheads on labour hours which were budgeted at 11,000 with overheads of $55,000. Actual hours worked were 10,900 and actual overheads were $57,500.
Overheads were:Hi yes I do agree… we cant be using this as a forum to answer homework questions.
Presumably you have a textbook with the answer in – if you need me to explain or clarify the answer – then please ask away!
Also if you can start a new thread for each new question that will help
Many Thanks
Cath
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