Fifth edition Alnoor Bhimani Charles T. Horngren Srikant M. Datar Madhav V. Rajan Farah Ahamed


Variable and absorption costing, explaining operating profit differences



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Variable and absorption costing, explaining operating profit differences.
(40 min)
1
Key inputs for profit statement calculations are
January February March
Opening stock Production Goods available for sale Units sold Closing stock
0 1,000 1,000 700 300 300 800 1,100 800 300 300 1,250 1,550 1,500 50 The unit fixed and total manufacturing costs per unit under absorption costing are
January February March
(a) Fixed manufacturing costs b) Units produced cab) Unit fixed manufacturing costs d) Unit variable manufacturing costs e) = (c) + (d) Unit total manufacturing costs
DKr 400,000
DKr
1,000
DKr 400
DKr 900
DKr 1,300
DKr 400,000
DKr
800
DKr 500
DKr 900
DKr 1,400
DKr 400,000
DKr
1,250
DKr 320
DKr 900
DKr 1,220

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