CIMA BA2 · Chapter 4 · Question 1 of 8
Under marginal costing, how are units of closing inventory of finished goods valued?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) At variable production cost only
Explanation
Marginal costing treats only variable production costs as product costs. Fixed production overheads are treated as period costs and written off in full in the period incurred, so they are not carried forward in inventory.
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