Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › OVER ABSORBED AND UNDER ABSORBED COSTING
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John Moffat.
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- April 14, 2020 at 5:23 pm #568269
Question
A company makes and sells a single product. At the beginning of Period 1, there are no opening
inventories of the product, for which the variable production cost is $4 and the sales price $6 per unit.
There are no variable selling costs. Fixed costs are $2,000 per period, of which $1,500 are fixed
production costs. Normal output is 1,500 units per period. In Period 1, sales were 1,200 units, production
was 1,500 units. In Period 2, sales were 1,700 units, production was 1,400 units.
Required:
Prepare profit statements for each period and for the two periods in total using both absorption costing
and marginal costing.Doubt:
How can I find the Over or Under absorbed over head ?
How to find gross profit?
How to find other costs?
April 15, 2020 at 11:21 am #568331Why are you attempting questions for which. you do not have an answer? You should be using a Revision Kit from on of the ACCA approved publishers – they have answers and explanations.
The question you have asked could not be asked in Paper PM. It is examinable in Paper MA and my free Paper MA lectures explain this in detail.
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