Bhimani, Horngren,
Datar and Rajan,
Management and Cost Accounting, 5
th
Edition, Instructor’s Manual
© Pearson Education Limited 2012
b Absorption profit statements The ambiguity about the 10,000- or unit denominator level is intentional. IF YOU WISH, THE AMBIGUITY MAYBE AVOIDED BY GIVING THE STUDENTS A SPECIFIC DENOMINATOR LEVEL IN ADVANCE. Alternative 1. Use 20,000 units as a denominator fixed manufacturing
overhead per unit is €280,000 ÷ 20,000 = €14.
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