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Forums › ACCA Forums › ACCA MA Management Accounting Forums › marginal/absorption costing
Hi, I was wondering if anyone had an any knowledge of marginal/absorption costing and could they lend a helping hand to a struggling student…..
If anyone would like to have a go at helping me the question is posed as follows:
Seaside Ltd’s budget provides for the manufacture and sale of 10,000 products per month.
The standard unit cost of each product is $6, made up as follows
Direct materials – $3.50
Direct Labour – $ 0.50
Fixed overhead $ 2.00
The selling price of each product is $8.00
Production and sales quantities for periods March 2013 and April 2013 were as follows
Production:
March – 10,000
April – 10,000
Sales:
March – 8,000
April 12,000
I’m asked to prepare operating statements for each of the two months assuming
i) The company uses marginal costing
ii) The company uses absorption costing
I’m having varying degrees of success but what I’d really like would be to see the workings, i can do the operating statements from there, and again thank you for your time, any help or guidance afforded to me would be greatly appreciated.
