Break-even point - meaning and formula

Absorption costing statement proforma.

Absorption costing statement is the statement which analyse financial data into production and non production in order to calculate profit which will be presented to external users. In many cases absorption costing statement is prepared by following the generally accepted accounting standards such as IFRS.

Here below is how absorption costing statement proforma looks like.

PARTICULARS
TSH
TSH
Sales revenue
 
 
xxx
Less: absorption cost of sales
 
 
Opening stock (valued at absorption cost)
xxx
 
Add: production cost (valued at absorption cost)
xxx
 
Total production cost
xxx
 
Less: closing stock (value at absorption cost)
(xxx)
 
Absorption cost of production
xxx
 
Add: selling, administration and distribution cost
xxx
 
Absorption cost of sales
 
 
(xxx)
Unadjusted profit
 
xxx
Fixed production overhead absorbed
xxx
 
Fixed production overhead incurred
(xxx)
xxx
Adjusted profit
 
xxxxx

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