Cost & revenues

Clarekaye

Hi all,

I am currently doing cost & revenues using osborne books.

Can someone really plain and simply tell me why when working out marginal costs you put the closing stock figure somewhere different than if you were working out absorption costs?

Yes I know its sunny outside and I should be out there :thumbdown:

wbauk2002

just did my cost and revenues exam today

not sure i read anything about closing stock? or maybe i missed it

But in marginal costing variable costs are charged to the unit costs, but the fixed costs arent and just go to the income statement as an expense

janwal

Hi Clare

I have just rechecked mine (also doing CRS) and in BPP they are both in the same place (in the income statement) where does it show different in Osbourne.

Jan

Clarekaye

I am doing 7.3 on page 213, then checked my answer i did it wrong anyway but they have them further down on the absorption part?
How did you find the exam did you pass?

Richard

I've just dug out an old Osborne text book from when I did AAT Unit 6 - Costing.

From an example they have used, it appears that they include closing stock as part of the variable costs when preparing the income statement using marginal costing, as the stock is valued using only the variable costs.

However when using absorption costing, stock is valued using the variable and fixed costs, so they show it separately from the fixed and variable costs.