Difference between absobtion and marhinalcosting

Reference no: EM13338034

Ace engineering Limited manufactures high quality drills foruse in the medical industry. The finacial director is consideringnext years production and needs to make decisions based on costinginformation. the following is available

Wholesale selling price per drill $40

Materials to produce adrill $15

Direct labour perdrill $12

overheads $245000

Ace engineering is planning to produce 25000 drills nextyear

(a) Explain the difference between absobtion and marhinalcosting

(b) calculate the marginal cost per drill

Reference no: EM13338034

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