Company A for the year ending 31/12/06 produced 11,000 unit of Product X but only 10,000 units were sold at $20 each.
More data as follows:
| (a) Manufacturing costs | $ |
| Direct material | 6 per unit |
| Direct labor | 4 per unit |
| Variable overheads | 2 per unit |
| Fixed overheads | $22,000/year |
| (b) Selling &Distribution | $ |
Variable cost | 1.50 per unit |
Fixed cost | $20,000/year |
© General Expenses (assuming all fixed expenses) | $15,000 |
Assume that actual overheads = budgeted.
Question:
(a) Prepare the Income Statement Under the Marginal Costing Approach
(b) Prepare the Income Statement Under the Absorption Costing Approach.
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FCCA,CA(MIA)with more than 26 years of post-qualifying working experiences. Previous working stints with one of the big accounting four,Regional GFC & Group Treasurer in a group of Malaysian and Group CFO in Singapore public listed concern.Also author to another very popular free educational accounting cum finance blog:http://basiccollegeaccounting.com under the branding of College Accounting Coach.
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