Sheikh B.

asked • 14d

Absorption costing (ii) marginal costing

z limited is considering its plans for the year ending 31, December 2001 it makes and sells a single product, which has budgeted costs and selling price as follow:Selling price 81.0 Direct materials 19.80 Direct materials 19.8 Direct labour 14.4 Production overhead: Veriable 7.2 Fixed 5.4 Selling overhead : Veriable 9.0 Fixed 3.6 Administration Overhead : Fixed 5.4 Fixed overhead cost per unit are based on anormal activity level of 172,800 units. these costs are expected to be insured at a constant rate through out the year. Activity level during January and February 2001 are expected to be January Feburary Units Units s sales 12,600 15750 Production 15300 13950 Assume that there will be no stocks held on j1 january 2001. Required. Prepare , in columnar format , Profit statements for each of two months of January and Feburary 2001 using :Absorption costing (ii) marginal costing

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