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PROFIT DIFFERENCE

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › PROFIT DIFFERENCE

  • This topic has 1 reply, 2 voices, and was last updated 2 years ago by John Moffat.
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  • September 20, 2023 at 8:20 pm #692350
    samiaasif942
    Participant
    • Topics: 31
    • Replies: 4
    • ☆

    25,000 units of a company’s single product were manufactured in a period during which 28,000 units were sold. Unit costs of the product were

    Direct costs $16.20
    Fixed production overheads $7.60
    Fixed non-production overheads$2.90

    What is the difference between the absorption costing profit and the marginal costing profit for the period?

    I wana know do we include fixed non production overheads or not in valuing the defference??

    September 21, 2023 at 7:48 am #692369
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54835
    • ☆☆☆☆☆

    No. The difference is only the production overheads multiplied by the change in the inventory.

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