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- Dec 7, 2021
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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.
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.