Chapter 21, Problem 20QS

To determine

QS 21-20

Introduction:

Absorption costing is a method to be used for computing product cost which includes all type of direct cost. As far as indirect cost is concerned it is absorbed by all unit produced. It means units of finished goods remains in stock will include variable as well as fixed manufacturing cost.

To Determine:

Income statement under Absorption costing or say amount remaining after deducting total expenses (Variable as well as Fixed) out of income