Reconciling variable (direct) and absorption costing profits

[@oratilekatlegokgati9137]

One of the best lecturers I've ever heard... I hope you still doing good Mr Francois Steyn..

[@TabaldiEducation]

Thank you, Oratile. I appreciate your comment and hope you are well too!

[@prenishanaidoo7180]

Why am I only finding this now.brilliant!

[@Arunpreet12]

I now understand, thank you very much

[@TabaldiEducation]

I am glad to hear that!

[@durandtvermaak4219]

Baie dankie Francois, nou het ek hom! 😊

[@TabaldiEducation]

Uitstekend, Durandt!

[@waistcoat5066]

Hello, thank you for the lecture! Definitely one of the clearer ones - subbed! There is one thing I am unclear about, if you are able to answer I would greatly appreciate, thank you! I understand how the *gross* profit is reduced when going from absorption to variable by $2000. However, when we remove the fixed production cost of 4000 from closing inventory, doesn't that 4000 then get added to the fixed production cost as an in-period expense in the variable costing's P&L? so the *net* profit would be $6000 lower?

[@TabaldiEducation]

Hi, thanks for the feedback. Remember, the ONLY thing that results in a difference in profit between variable and absorption costing is the fixed manufacturing overheads portion included in opening and closing inventory. The fixed manufacturing overheads for the period is the same between the two. In absorption costing, it is the allocated MOH plus/minus the under/over allocation. In the variable costing IS it is the actual (which is the same as the allocated +- the under/over). I hope that makes sense.

[@mishkaahrugbar4890]

Thank you💐

[@aaliceabuzaid2621]

any excel sheet is available ? thx

[@TabaldiEducation]

Unfortunately not at this point. Feel free to ask if you have any questions.

[@usamazahid7648]

If opening and closing doesn't mentioned how we can do recosile

[@Angela4real7]

Thanks for sharing

[@alexsawler1803]

THANK YOU

[@PatrickMothoagae-py2ft]

❤

[@kassandraharrison1181]

i cannot figure out his accent

[@TabaldiEducation]

South African :)

[@ANA-db9yn]

My dear , bring someone talking English straightly

[@karan_karan_karan]

dont be rude. also ur comment is bad english so what now?

[@givemebeidou2446]

What does that even mean? His english and explanation is so clear