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RRyan9y ago
I wanna confirm that we use actual fixed production overhead incurred to subtract from the contribution in marginal costing income st. to find the profit and not the standard fixed overhead.
RRyan9y ago#1
another question in job costing the costing is done based upon absorption costing.right?it also absorbs overhead thru overhead absorption rate based on actual labour or machine hours taken in a job.right?
John MoffatJohn MoffatTutor9y ago#2
First question - if you are calculating the actual profit, then yes.
John MoffatJohn MoffatTutor9y ago#3
Job costing is usually absorption costing (but it is not a rule - the question could say different). There is no standard rule either about how to absorb it - usually it is on labour hours or machine hours, but it could be (for example) on prime cost. The question will have to tell you how it is to be absorbed.
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