UESTION
The finance director FD has been tasked by the board to calculate the profit of changin costing system from variable to absorption costing. The FD has requested you ga necessary information and provide the relevant calculations.
You obtained the following information:
tableDetailUnits producedmanufactured during the period,Units sold during the period,Variable cost per unit,RSelling price per unit,RtableTotal fixed costs for the period NB: IncludesR fixed manufacturing costsR
Compare the profitability of the two costing systems.
Explain the difference in profitability in the previous question
would happen to profit figures in period if units are manufactured and units are sold, considering units of initial inventory from period
Which costing system would you recommend and why?
