Under Absorption Costing Technique BRAND. Broad Research in Accounting, Negotiation, and Distribution ISSN 2067-8177, Volume 4, Issue 1, March, 2013 This shows a loss of Rs. 9,000 in month of June instead of profit. So absorption costing shows a wrong picture of firm and puts all the viewers of financial statement in dark by not depicting the true picture of firm’s profit and loss. In such scenario if the firm uses absorption costing technique it should not used its bonuses Awa, weat¢ wathacst Bam ka Am NAS eens! CO Retiee TAAbRS AA DAtmeR Am LASAceirmaent Re DacesAial Thaw Absorption costing and marginal costing shows different profit where opening and clos tock vary. They are shown as follow; The above cases depicts that situation of profit is largely dependant upon opening and closing inventory. Alternatively, when production is more, more profit in absorption than marginal and when sales is more, more profit in marginal than absorption. The cases are different because in absorption costing the profit is a function of sales and in absorption costing profit is a function of production. This scenario also depicts that in absorption costing by merely increasing production to Absorption Costing Statement BRAND. Broad Research in Accounting, Negotiation, and Distribution ISSN 2067-8177, Volume 4, Issue 1, March, 2013
