b
Absorption costing (in DKr)
January 2011 February 2011 March 2011 Profit a 2,000,000 3,750,000 Cost of goods sold Opening stock b 0 390,000 420,000
Variable manufacturing costs c 900,000 720,000
1,125,000
Fixed manufacturing costs d
400,000 400,000 400,000
Cost of goods available for sale 1,300,000 1,510,000 1,945,000
Closing stock e
390,000 420,000 61,000
Cost of goods sold
910,000 1,090,000 1,884,000 Gross margin
840,000 910,000 1,866,000 Marketing costs
Variable marketing costs f 420,000 480,000 900,000
Fixed marketing costs
140,000 140,000 140,000
Total marketing costs
560,000 620,000 1,040,000 Operating profit
280,000 290,000 826,000 a DKr 2,500 × 700; DKr 2,500 × 800; DKr 2,500 × 1,500 b DKr 900 × 0; DKr 1300 × 300; DKr 1,400 × 300 c DKr 900 × 1,000; DKr 900 × 800; DKr 900 × 1,250 d DKr 400 × 1,000; DKr 500 × 800; DKr 320 × 1,250 e DKr 1,300 × 300; DKr 1,400 × 300; DKr 1,220 × 50 f DKr 600 × 700; DKr 600 × 800; DKr 600 × 1,500
2
(
) (Absorption costing
Variable costing operating income operating income stock closing in costing manufactur
Fixed
− stock opening in costing manufactur
Fixed
January: DKr
280,000
− DKr 160,000 = DKr 120,000 − DKr 0
DKr 120,000 = DKr 120,000 February DKr
290,000
− DKr 260,000 = DKr 150,000 − DKr 120,000
DKr 30,000 = DKr 30,000 March DKr
826,000
− DKr 960,000 = DKr 16,000 − DKr 150,000
− DKr 134,000 = − DKr 134,000 The difference between absorption and variable costing is due solely to moving fixed manufacturing costs into stocks as stocks increase (as in January) and out of stocks as they decrease (as in March.
Bhimani, Horngren, Datar and Rajan, Management and Cost Accounting, 5 th Edition, Instructor’s Manual © Pearson Education Limited 2012 Share with your friends: |
