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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