Page 19 - Microsoft Word - 00 CIMA F1 Prelims STUDENT 2018.docx

Traditional costing

Example 4

Calculate the absorption costing profits for Limco.

Solution

$

Marginal costing profit 520,000
Change in inventory × fixed overheads per unit

3,000 units × $10 per unit 30,000
–––––––

Absorption costing profit 550,000
–––––––

Illustrations and further practice

Now try examples 4 and 5 from Chapter 1.

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