usling principles. 15 Absorptio 7.15 Part 1, June 2004)(40 minutes] loss would be the same n vs. marginal costing. IFrom ACCA Financial Information for Management Absorption vs. marginat e Ltd is a small company manufacturing and selling two different products -the Lang and the Dale. Each product passes through two separate production cost centres- Lang an Lang anining department, where all the work is carried out on the same general purpose inery, and a finishing section. There is a general service cost centre providing facili- for all employees in the factory. The company operates an absorption costing system ties for aand have been extracted from the hection has artm extracted from the budget for the coming year: using budg machine ou budgeted overhead absorption rates. The management accountant has calculated the ine hour absorption rate for the machining department as 3.10 but a direct labour r absorption rate for the finishing section has yet to be calculated. The following data Product Sales (units) 0 6000 7 200 Production (units) 10400 Direct material cost per unit Direct labour cost per unit: - machining department (E8 per hour) - finishing section (6 per hour) Machining department - machine hours per unit E42 Fixed production overhead costs: - machining department - finishing section - general service cost centre 183 120 E241 320 82800 Number of employees: - machining department 14 - finishing section - general service cost centre Service cost centre costs are reapportioned to production cost centres