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In a month z co has budgeted sales of 15000 units and budgeted production of 17000 units the profit under marginal costing is 10000 lower than when profit is calculated under absorption costing the fixed production overhead cost per unit was sir how can I solve this question
Assuming you have watched all of my free lectures you will know that the only difference ever between the marginal and the absorption profits is the change in the inventory multiplied by the fixed overhead cost per unit.
Here the inventory is increasing by 2,000 units. The profit is different by $10,000. So the fixed overheads per unit must be $10,000 / 2,000.
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