Page 9 - Microsoft Word - 00 CIMA F1 Prelims STUDENT 2018.docx
P. 9
Traditional costing
Absorption costing
3.1 The standard cost card
In absorption costing, ALL production costs are included in the standard
cost of production.
$
Direct materials X
Direct labour X
Variable overheads X
Fixed production overheads* X
–––
Absorption cost per unit X
–––
* based on the overhead absorption rate.
5
