The following cost information relates to factory for two years. Work out the profit under absorption costing
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The following cost information relates to factory for two years.
Work out the profit under absorption costing and marginal costing for the two years. Also state any abnormality in the results disclosed by absorption costing. Assume FIFO basis.
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Installed capacity (units) Opening stock (units) Closing stock (units) Output (units) Selling price per unit Fixed costs for the year Variable cost per unit 2001 10000 Nil 1000 10000 14 85000 2.90 2002 10000 1000 Nil 9000 14 85000 2.90
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To calculate the profit under absorption costing and marginal costing for the two years we need to compute the cost of goods sold COGS using these two ...View the full answer
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