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example 4 chapiter 8

This topic has 1 reply, 2 voices, and was last updated 9 years ago by John Moffat.

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February 18, 2016 at 11:25 am #300950
josy87
Member
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Hello Sir
Please
“Fixed overheads of the company currently amount to $1,000,000. The management accountant has decided
that 20% of these should be absorbed into the new product”
why this was ignored in the answer?
thanks
February 18, 2016 at 1:28 pm #300981
John Moffat
Keymaster
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You do need to watch the free lectures because I stress this point in the lecture!!
Absorbed simply means charging. We can charged between projects any way we like for profit purposes, but it does not mean that the total changes. It is only relevant if the total changes.
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