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profits/losses using absorption and marginal costing

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › profits/losses using absorption and marginal costing

  • This topic has 0 replies, 1 voice, and was last updated 4 years ago by poonyisa.
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  • June 18, 2020 at 9:20 am #574162
    poonyisa
    Member
    • Topics: 3
    • Replies: 1
    • ☆

    a company manufactures and sells a single product. In two consecutive months the following levels of production and sales (in unit) occurred:

    month 1 month 2
    sales 3,800 4,400
    production 3,900 4,200

    opening inventory for month 1 was 400 units. Profits or losses have been calculated for each other month using both absorption and marginal costing principles

    which of the following combinations of profits and losses for the two is consistent with the above data?

    ANSWER:

    absorption costing profits/ losses marginal costing profit/ losses
    month 1 month 2 month 1 month 2
    $ $ $ $
    200 3200 (400) 4400
    please kindly explain, how to come up with this answer
    Thank you.

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