Difference in profits of marginal and absorption costing

Marginal and Absorption costing are different techniques for assessing profits in a period.

in case of change of stock during the period both will give different results for profit obtained .

1. if stock level increase absorption costing will report higher profits.
2.if stock level decrease absorption costing will report lower profits.
3.if the opening and closing stock volumes are same , marginal and absorption costing will report same profits.


NOTE : in the long run , total profits for the company will be the same whether marginal or absorption costing is used.