Absorption Costing: Income Statement & Marginal Costing
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Absorption Costing: Income Statement & Marginal Costing
Absorption costing takes into account all costs associated with the manufacturing of products, regardless of whether the products were sold or not. Learn about absorption costing and marginal costing and their impact on the income statement.
28K viewsJul 8, 2017
Total absorption costing Definition
Variable versus absorption costing Angora Creations Co. manufactures wool sweaters. Costs incurred in making 45,000 sweaters in September included 180,000 of fixed manufacturing overhead. The total absorption cost per sweater was 34.80. Required: a. Calculate the variable cost per sweater. b. The ending inventory of sweaters was 6,400 units lower at the end of the month than at the beginning of the month. By how much and in what direction (higher or lower) would cost of goods sold for the month
Variable versus absorption costing Angora Creations Co. manufactures wool sweaters. Costs incurred in making 45,000 sweaters in September included 180,000 of fixed manufacturing overhead. The total absorption cost per sweater was 34.80. Required: a. Calculate the variable cost per sweater. b. The ending inventory of sweaters was 6,400 units lower at the end of the month than at the beginning of the month. By how much and in what direction (higher or lower) would cost of goods sold for the month
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