February 2025

Absorption of Overheads: Reapportionment of service costs where there is interwork

By |2025-02-12T09:37:42+02:00February 12th, 2025|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Reapportionment of service costs where there is interwork

  • We have already looked at the need for reapportioning the portion of overheads that would have been allocated and apportioned to service cost centres
  • We also looked a simple example where there was no inter work among departments […]
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Absorption costing:Statement of Profit or Loss

By |2025-02-12T08:57:11+02:00February 12th, 2025|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Absorption costing:Statement of Profit or Loss

  • Profit is the overriding aim of most businesses and for this reason management accountants do also prepare income statements (also known as statement of profit or loss)
  • Although similar in spirit to the Income Statement prepared by Financial Accountants it […]
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Absorption Costing: Statement of Profit or Loss Example

By |2025-02-12T08:59:00+02:00February 12th, 2025|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Absorption Costing: Statement of Profit or Loss Example

  • We have already looked at the format of a Statement of Profit or Loss under Absorption Costing here
  • It is now time to look at an example

Example Question

Oakwood Manufacturing Ltd started in business on 1 January 20×8 […]

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Absorption Costing: Statement of Profit Worked Example

By |2025-02-12T09:07:36+02:00February 12th, 2025|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Absorption Costing: Statement of Profit Worked Example

The Question

Zambe Ltd produces […]

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Uses and Limitations of Absorption Costing

By |2025-02-12T09:08:41+02:00February 12th, 2025|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Absorption Costing: Uses and Limitations of Absorption Costing

  • According to research by CIMA the leading Management Institute
  • Traditional costing methods such as Absorption costing are still in widely used by manufacturing businesses throughout the world
  • There is are reasons for this

Uses/Advantages of Absorption costing

  • Often used […]
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Marginal Costing: Introduction

By |2025-02-12T09:13:35+02:00February 12th, 2025|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Marginal Costing: Introduction

  • We have already looked at absorption costing here
  • Now it is time to examine marginal costing which is an alternative way of looking at things
  • For while absorption costing treats production overheads as a product cost by assigning a share of these […]
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Marginal Costing: Statement of Profit or Loss

By |2025-02-12T09:13:55+02:00February 12th, 2025|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Marginal Costing: Statement of Profit or Loss

  • As has been outlined here there are differences between marginal costing and absorption costing
  • One such stark difference is in the format of statements of profit
  • Below is a proforma Statement of Profit using marginal costing

Marginal Costing Statement […]

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Marginal Costing: Statement of Profit Worked Example

By |2025-02-12T09:16:58+02:00February 12th, 2025|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Marginal Costing: Statement of Profit Example

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Reconciliation of absorption and marginal profits

By |2025-02-12T09:20:51+02:00February 12th, 2025|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Reconciliation of marginal costing and absorption costing profits

  • Because absorption costing includes the cost of fixed overheads in:
    1. Opening and closing inventory and
    2. Cost of sales
  • There will be inevitable differences in profit figures calculated using the two methods
  • These differences will arise whenever there […]
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Reconciliation of Marginal Costing and Absorption Costing Profits Example

By |2025-02-12T09:22:33+02:00February 12th, 2025|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Reconciliation of marginal costing and absorption costing profits

  • As has been said here, due to changes in inventory levels from period to period
  • The profit figures obtained using absorption costing and marginal costing method might vary
  • It is now time to look at an example

The […]

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