Page 64 - F2 Slides 2017-18
P. 64
Absorption and marginal costing
ABSORPTION COSTING MARGINAL COSTING
Adjusting for Yes – in the statement of None needed
over- or under- profit or loss
absorption
Impact of Gives higher profit Gives lower profit
increase in
inventory levels
Impact of Gives lower profit Gives higher profit
decrease in
inventory levels
Inventory level Same profit under both systems
constant
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