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Marginal and absorption costing again

katsutlieffkatsutlieff Trusted RegularPosts: 459Registered
in AAT Level 3 (Level 6 in Scotland)
Please can someone help me with this question it is on the practice ecr paper. I have been staring at it all day and have given up.

Direct Materials............£19600
Direct Labour..........£21280
Variable Pro O/H.......£17920
Fixed Pro O/H...........£29120
Admin etc.........£33600
Total costs..........£121520

O/H absorption rate is £5.20
Opening stock 5000 units
Closing stock 4200 Units

I need to work out the marginal cost profit and the absorption cost profit. I have worked out the marginal cost per unit, the absorption cost per unit and cost of sales for both. But how do I work out the profit without the sales figures?
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Comments

  • katsutlieffkatsutlieff Trusted Regular Posts: 459Registered
    Sat on the train on the way to my exam (still not sure if I can sit it) and it's all become clear. With a little help from my pass cards. Difference in profits is the difference between fixed production o/h included in o/s and c/s valuation using absorption costing
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  • PGMPGM Font Of All Knowledge Posts: 1,954Registered
    Bit late to help then! :D

    Good luck, hope it went well?!
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