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
raw an organization chart of any actual or hypothetical manufacturing organization to show the position of management/cost accounting department within an organization and discuss

Alternative to Total Overhead Variances There is an easier approach to overhead variances.  In this approach, the overheads are NOT sub-divided into their fixed and variable e

The gross earnings of the factory workers for Vargas Company during the month of January are $66,000. The employer's payroll taxes for the factory payroll are 8,000. The fringe ben

Presented here is the basic financial information from the 2009 annual reports of Intel and Advanced Micro Devces (AMD), the two primary manufacturers of silicon chips for personal

Example of Batch Costing The budgeted variable overheads of a company for the year of 2001 are as given as: Department                Overhead (shs.)

L I M I T A T I O NS OF STANDARD COSTING 1.     It may be very difficult to fix standards for all operations. 2.     Incorrect standards may result in wastage of mo

are eploration costs of a mining industry regarded as an asset or expense or both?

Find the following values for a single cash flow: a. The future value of $500 invested at 8 percent for 1  year b. The future value of $500 invested at 8 percent for 5 years

The controller for U.S. Route 66 Truck Parts is comparing traditional overhead allocationwith ABC. After studying both approaches, the controller prepared the following list of fea

rocess costing Prepare a spreadsheet to solve the following process costing problem. Review the four process costing videos provided in Interact Resources. Note that in the situati