題目

The following question is taken from the June 2013 exam paper.

A company has the following budgeted costs and revenues:

???????????????????????????????????????????????????????? $ per unit

Sales price??????????????????????????????????????????? 50

Variable production cost?????????????????????? 18

Fixed production cost??????????????????????????? 10

In the most recent period, 2,000 units were produced and 1,000 units were sold. Actual sales price, variable production cost per unit and total fixed production costs were all as budgeted. Fixed production costs were over-absorbed by $4,000. There was no opening inventory for the period.

What would be the reduction in profit for the period if the company has used marginal costing rather than absorption costing?

A

4,000

B

6,000

C

10,000

D

14,000

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Chapter9AbsorptionandmarginalCosting

The correct answer is C. This can be calculated by multiplying the increase in finished goods inventory of 1,000 units (2,000 units produced less 1,000 units sold) by the fixed production cost per unit that will be included in absorption costing closing inventory valuation.

The distracters were all based around the $4,000 over-absorption of fixed production cost. Distracter A suggests that the difference in profits will be equal to the over- absorption of fixed production cost, whereas B and D suggest that it is due to a difference in inventory valuation and over-absorption of fixed production cost. Incorrect answers were roughly evenly spread around the 3 distracters, suggesting a misunderstanding of under- or overabsorption (or possibly a high level of guessing).

Under- or over-absorption adjustments to profit do not cause a difference between marginal and absorption costing profits. They simply ensure that absorption costing charges the same amount of fixed overhead as marginal costing.

If we look in more detail at the situation it is apparent that the over-absorption of $4,000 was caused by the production of 400 units more than budgeted ($4,000 ^ $10 per unit). Budgeted production would therefore be 1,600 units (2,000 units actually produced less the 400 units above).

It follows that budgeted fixed production cost was therefore 1,600 units x $10 per unit = $16,000. As actual fixed production cost was equal to budgeted, marginal cost fixed production costing would have recorded an actual fixed production cost of $16,000.

Absorption costing would have charged $20,000 of fixed production cost to product (2,000 units produced x $10 per unit), however the adjustment for over-absorption would have corrected this overcharge and reduced this cost by $4,000, resulting in the same fixed production cost as marginal costing.

The important point is that it is not under- or over-absorption that causes the difference between profits under absorption and marginal costing principles. The difference in profits is caused by the difference in finished goods inventory valuations.

多做幾道

Which of the following statements about management accounting information is/are true?

(i) They must be stated in purely monetary terms.

(ii) Limited companies must, by law, prepare management accounts.

(iii) They serve as a future planning tool and are not used as an historical record.

A

(i), (ii) and (iii)

B

(i) and (ii)

C

(ii) only

D

None of the statements is true

Which of the following statements is/are correct?

(i) A management control system is a term used to describe the hardware and software used to drive a database system which produces information outputs that are easily assimilated by management.

(ii) An objective is a course of action that an organisation might pursue in order to achieve its strategy.

(iii) Information is data that has been processed into a form meaningful to the recipient.

A

(i), (ii) and (iii)

B

(i) and (iii)

C

(ii) and (iii)

D

(iii) only

Good information should have certain qualities. Which of the following are qualities of good information?(i) Complete(ii) Extensive(iii) Relevant(iv) Accurate

A

(i), (ii) and (iii)

B

(i), (iii) and (iv)

C

(ii) and (iv)

D

All of them

Monthly variance reports are an example of which one of the following types of management information?

A

Tactical

B

Strategic

C

Non-financial

D

Operational

Which of the following statements is/are correct?

(i) Information for decision-making should incorporate uncertainty in some way

(ii) The data used to prepare financial accounts and management accounts are the

A

(i) is true and (ii) is false

B

(ii) is true and (i) is false

C

Both are true

D

Both are false

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