UK Actual Costing - Fixed Cost Movement in Stock


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Hi All - we have recently implemented a new business system which follows an actual costing concept rather than standard costing concept.

However when stock is debited with the fixed overhead rate the credit is sent to the P&L.

This obviously distorts the accounts when we sell less than we made.

Apparently a fixed cost movement in stock line was not expected in the P&L with actual costing as now the P&L should just shows the Cost of Goods Sold and I would therefore like support to understand the best treatment of this credit.
 
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