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Marginal costing

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Marginal costing

  • This topic has 1 reply, 2 voices, and was last updated 3 months ago by John Moffat.
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  • April 18, 2022 at 10:44 am #653733
    hermela
    • Topics: 18
    • Replies: 7
    • ☆

    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?

    April 19, 2022 at 8:27 am #653865
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 49927
    • ☆☆☆☆☆

    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.

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