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marginal and absorption costing

Forums › ACCA Forums › ACCA MA Management Accounting Forums › marginal and absorption costing

  • This topic has 4 replies, 3 voices, and was last updated 14 years ago by Anonymous.
Viewing 5 posts - 1 through 5 (of 5 total)
  • Author
    Posts
  • March 23, 2011 at 10:26 am #47845
    chipo2010
    Participant
    • Topics: 1
    • Replies: 1
    • ☆

    somebody help me out with this;in a period were opening inventory was 5000units and closing inventory was 3000 units,a company had a profit of $92000 using absorption costing.if the fixed overhead absorption rate was $9 per unit,calculate the profit using marginal costing.

    April 1, 2011 at 4:15 pm #80194
    haymd1
    Member
    • Topics: 9
    • Replies: 26
    • ☆

    110000

    April 1, 2011 at 4:20 pm #80195
    haymd1
    Member
    • Topics: 9
    • Replies: 26
    • ☆

    Opening < closing
    5000 < 3000
    PUM=PUA+FOH/unit x change in stock
    where PUM= profit under marginal
    PUA= profit under absorption
    FOH/unit Fixed overhead/unit
    change in stock= difference between opening and closing
    so,
    PUM=92000+9×2000
    92000+18000
    110000

    April 1, 2011 at 4:22 pm #80196
    haymd1
    Member
    • Topics: 9
    • Replies: 26
    • ☆

    i am sorry i wanted to say opening > closing

    April 4, 2011 at 9:47 am #80197
    Anonymous
    Inactive
    • Topics: 0
    • Replies: 4
    • ☆

    if inventory level have gone down then absorption costing profit will be less than the marginal costing and vice versa. the difference btw opening and closing is 2000 as sales so this will be 2000×9=180000+92000 as the profit in absoption=110000

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