urgent help needed please.. absorbtion v marginal costings.??

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QueenCersai
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Report Thread starter 6 years ago
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Can anyone help with this question... i've followed all my examples but getting the same answer for unit cost using both methods, which can't be right, can it? I've gone over and over it and am now more confused the more i look at it.1. For your company; you have designed a new component,which may revolutionise the manufacture of your particular product. Below liststhe costing related to your new component: Product costs: Variable, material, labour etc: £15 per itemFixed, machinery, tollingheating etc: £25,000per year Administration +selling overheads:Fixed: £45,000 The company have to decide whether to make the components and sell them.Calculate the selling price based on absorption and marginal costing techniques.The company wish to make a 45% profit on each unit.Analyse the most appropriate costing method if production is at a rateof 100 models of your component per hour and sales are predicted to be 20,000per year.Can anyone help or point me in th right direction?
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