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sajoz
Participant
Question: Last month opening inventory was 6000 units and the closing inventory was 4000 units. Using absorption costing this closing inventory was valued at $33,000. Using marginal costing last month’s profit was $50,000 and using absorption costing it was $41,000.What was the variable production cost per unit last month?
| QUOTE EDIT | REPLYOctober 12, 2017 at 8:13 am
sajoz
Participant
I have tried this question above and below is my solution:
difference in profits is $9000. Therefore $9000 divided by the change in inventory which is 2000 units = $4.50 = fixed production cost per unitinventory value $33000/4000 units = $8.25 = total production cost
So the variable production cost per unit should be $8.25 – $4.50 = $3.75
Somebody please confirm
Thank you.
If you ask in this forum then ‘somebody’ will always be me (because I am the tutor for F2!) 🙂
Your answer is correct.
(But why are you attempting questions for which you do not have an answer? Best is to use a Revision Kit from one of the ACCA approved publishers – they have lots of questions together with answers and explanations)
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