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If a company changes from conventional to abc costing what happens to profit and contribution ?
My view profits will be same. I can’t figure out contribution
ABC absorbs the fixed overheads differently.
With marginal costing the contribution will not be affected because we do not absorb the fixed overheads.
With absorption costing the profit will change because the opening and closing inventories will be valued differently when using ABC.
However, you cannot be asked calculation questions on ABC in Paper MA (calculations are not examined until Paper PM).
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