Determine profit by using absorption costing, Cost Accounting

Determine Profit by Using Absorption Costing

Assuming the fixed overhead absorption rate was Ksh.3 per litre, then what would be the profit utilizing absorption costing?

a) Ksh.41, 850

b) Ksh.56, 850

c) Ksh.67, 350

d) Ksh.82, 350

Solution

Stock levels reduced; consequently the absorption costing profit would be lower. So you can remove options (c) and (d).

Difference in profit = (8,500 - 6,750) x Ksh.3

= Ksh.5, 250

Absorption costing profit = Ksh.62, 100 - Ksh.5, 250

= Ksh.56,850

The right answer is (b)

Posted Date: 2/7/2013 12:06:33 AM | Location : United States







Related Discussions:- Determine profit by using absorption costing, Assignment Help, Ask Question on Determine profit by using absorption costing, Get Answer, Expert's Help, Determine profit by using absorption costing Discussions

Write discussion on Determine profit by using absorption costing
Your posts are moderated
Related Questions
Capability Maturity Model Integration (CMMI) is a process development approach that gives organizations with the essential elements of effective processes. It can be used to gui

Stores layout and location - Material Handling The layout of stores must ensure as a) For movement of material, ease of access out and in of stores b) The issue of peris

Special order pricing - Shorewood Shoes Company makes and sells a variety of leather shoes for children. For its current mix of different models and seizes, the average selling pri

Calculate the equal monthly payments and the cost of financing on a 10-year mortgage. The cash value of the house today is $500,000. You are paying monthly at a fixed rate of 6% pe

Illustration of Overhead Variance Analysis Again for intentions of our demonstrations in overhead variance analysis, we will suppose the given basic data for company in the pr

On a New product development process of making a new S3 STORAGE SIM card phone storage device for end users, forecast the following With full working and tabulations; a) With fu

Process of Setting Standards in Standard Costing Establishing correct a standard is extremely important due to the accuracy of the standards usually finds out the success of t

Please complete the following 7 exercises below in either Excel or a word document (but must be single document). You must show your work where appropriate (leaving the calculation

Encik Farid, a sole trader, started his business on 1 May 2010 under the name Farid Enterprise. The following are his business transactions for the month of May a. Encik Farid b

What are the major features of JIT?