A-LevelAccountingCostingOct/Nov 2010Paper 1 Q281 Mark
A manufacturer has 700 units of finished goods in stock on 1 March. On 31 March the total number of units in stock is 770. At present, stock is valued using the total costing method. What would be the effect on the operating profit if the marginal costing method is used for stock valuation?
Aincrease operating profit
Bno change in operating profit
Cno change in operating profit but a 10% increase in gross profit
Dreduce operating profit
✓ Correct Answer
The correct answer is D. This question tests the candidate's understanding of costing within the Accountingsyllabus. The examiner's mark scheme requires...
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Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...
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