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John Moffat.
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hermela
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In marginal and absorbtion costing do we deduct selling and adminstration price from the profit or is it included with variable overhead cost and we get the profit?
John Moffat
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In absorption costing they are subtracted from the gross profit to get the net profit.
In marginal costing, the variable selling costs are subtracted in arriving at the contribution, any fixed costs are subtracted from the contribution to get the profit.
I illustrate both in my free lectures on marginal and absorption costing.
hermela
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