MAC2601 ASSIGNMENT 3 ANSWERS DUE 06 MAY 2025 COMPLETE SOLUTIONS 100% PASS GUARANTEED

, QUESTION 1(b)(i)

Applied fixed manufacturing overheads 100 000
Actual fixed manufacturing overheads 60 000
Overrecovery 40 000

QUESTION 1(b)(i)
Dr Cr
Production overheads clearance 40 000
Cost of sales (P/L) 40 000

QUESTION 1(c )

Direct costing only accounts for variable production costs as product costs whereas absorption costs
accounts for both variable production costs and fixed productions costs as product costs.

Direct costing calculates contribution whereas absorption cost calculates gross profit

Direct costing is ideal for internal decision making while absorption costing is required for external
reporting