Page 62 - F2 Slides 2017-18
P. 62
Absorption and marginal costing
ABSORPTION COSTING MARGINAL COSTING
Valuing units Total production cost Marginal (variable)
production cost
Valuing inventory Opening and closing Opening and closing
inventory valued at total inventory valued at
production cost marginal production
cost
Fixed production Carried forward from one Fixed costs charged in
overheads period to the next as part of full against profit in the
the closing / opening period in which they
inventory valuation. are incurred
Charged against profit when
units are sold
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