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SingaporeAccountingQuick questions
Cost and Management Accounting
Quick questions on Marginal versus absorption costing explained: H2 Principles of Accounting
4short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.
What is the rule linking inventory change to profit?Show answer
The relationship depends on whether inventory rises or falls:
What is q1?Show answer
Inventory rises by units and fixed overhead is \10$ per unit. State the effect on absorption profit versus marginal profit. [2 marks]
What is q2?Show answer
Marginal profit is \60\,0001\,000\ per unit. Find absorption profit. [3 marks]
What is q3?Show answer
Explain why the two methods give the same profit when production equals sales. [2 marks]
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