A-LevelAccountingTraditional costing methods9706/12 · May/June 2019 · Q251 Mark

A company produces less than it sells in a particular period. Which statement is correct?

AReported profit is the same whether absorption or marginal costing is used.

BReported profit is the difference between absorption and marginal costing closing inventories.

CReported profit is lower using absorption costing.

DReported profit is lower using marginal costing.

✓ Correct answer

C: Reported profit is lower using absorption costing.

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Topic: Traditional costing methods, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, May/June 2019 Paper 1 Variant 2, question 25.

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