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ACCA F2

Management Accounting (MA)

管理会计

ACCA Lecturer: Belinda Qiu

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Part B Accounting for Overheads

1. Absorption costing & process

2. Overhead absorbed

3. Under/over absorbed

4. Ledger entries for manufacturing cost


Part B Absorption and marginal costing

1. Marginal cost and marginal costing

2. Profit statement

3. Explanation of the difference in profit

4. AC VS MC



1. Marginal cost and marginal costing

1.1

Contribution=sales-VC

-frequently used by management accountant

output/sales +, contribution per unit (CPU)--, profit +

Total contribution =CPU* sales volume

Profit=total contribution- total fixed overheads



1.2 marginal costing





2. Profit statement

2.1 under marginal costing



2.2 under absorption costing



Example: Budget for a single product

SP=10, direct material=3, direct wages=2, variable OHs=1

Fixed production OHs=10000per month, production volume=5000units

(a) sales=production=5000units, profit?

(b) sales=4800<production=5000units, profit?



(a)-under AC

-under MC



(b)-under AC

-under MC



3. Explanation of the difference in profit

AC profit

+ opening stock @ absorption rate

- closing stock @ absorption rate

MC profit



4. AC VS MC



AC:



MC:


Part B Accounting for labor



Q1.

B



Q2.

B

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