Molex Berhad is a company that manufactures health products. The following is information related to production...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Molex Berhad is a company that manufactures health products. The following is information related to production costs. Variable cost per unit Direct raw materials Direct labor Factory overhead Administrative and selling costs Total variable cost per unit Fixed monthly expenses: Factory overhead Administrative and selling expenses Total monthly fixed cost The selling price has been set at RM40.00 per unit. The following is information related to production and sales units for the months of May and June 2021. May June Production unit Sales Minus: Cost of goods sold Beginning Stock Cost of production Total cost of goods sold Minus: Ending Stock Cost of goods sold 30,000 30,000 Sales Unit 26,000 34,000 May (RM) 1,040,000 RM 0 The following is the company's income statement for May and June 2021 prepared by the accounting unit using the absorption costing method. 900,000 900,000 120,000 780,000 6.00 June (RM) 12.00 4.00 3.00 25.00 240,000 180,000 240.000 1,360,000 120,000 900,000 1,020,000 0 1020,000 Gross profit Minus: Expenses Administrative and selling expenses Net profit before tax 260,000 258,000 2,000 340,000 282,000 58,000 Be required: a) Calculate the cost per unit of product using the marginal costing and absorption costing methods. b) Prepare income statements for the months of May 2021 and June 2021 using the marginal costing method. c) Adjust the net profit difference between marginal costing and absorption costing for May and June. d) Briefly explain why there is a difference in net profit between marginal costing and absorption costing methods. Molex Berhad is a company that manufactures health products. The following is information related to production costs. Variable cost per unit Direct raw materials Direct labor Factory overhead Administrative and selling costs Total variable cost per unit Fixed monthly expenses: Factory overhead Administrative and selling expenses Total monthly fixed cost The selling price has been set at RM40.00 per unit. The following is information related to production and sales units for the months of May and June 2021. May June Production unit Sales Minus: Cost of goods sold Beginning Stock Cost of production Total cost of goods sold Minus: Ending Stock Cost of goods sold 30,000 30,000 Sales Unit 26,000 34,000 May (RM) 1,040,000 RM 0 The following is the company's income statement for May and June 2021 prepared by the accounting unit using the absorption costing method. 900,000 900,000 120,000 780,000 6.00 June (RM) 12.00 4.00 3.00 25.00 240,000 180,000 240.000 1,360,000 120,000 900,000 1,020,000 0 1020,000 Gross profit Minus: Expenses Administrative and selling expenses Net profit before tax 260,000 258,000 2,000 340,000 282,000 58,000 Be required: a) Calculate the cost per unit of product using the marginal costing and absorption costing methods. b) Prepare income statements for the months of May 2021 and June 2021 using the marginal costing method. c) Adjust the net profit difference between marginal costing and absorption costing for May and June. d) Briefly explain why there is a difference in net profit between marginal costing and absorption costing methods.
Expert Answer:
Answer rating: 100% (QA)
a Cost per unit Method May RM June RM Marginal costing 2500 2500 Absorption costing 3600 3600 Calculation Marginal costing Variable cost per unit RM25... View the full answer
Related Book For
Managerial Accounting
ISBN: 9781260247787
17th Edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
Students also viewed these accounting questions
-
Two blocks are connected by a massless rope as shown below. The mass of the block on the table is 4.6 kg and the hanging mass is 0.5 kg. The table is frictionless, and the pulley is frictionless and...
-
Altec Manufacturing Inc. is a company that manufactures and sells a single product, which they call an Altec. For planning and control purposes they utilize a monthly master budget, which is usually...
-
The Hampshire Company manufactures umbrellas that sell for $12.50 each. In 2014, the company made and sold 60,000 umbrellas. The company had fixed manufacturing costs of $216,000. It also had fixed...
-
Consider an atom diffuses in a 3 D simple cubic lattice by a random walk mechanism. The atom jumps 6 x 1 0 - 5 times per second at 3 0 0 K and 3 x 1 0 4 times per second at 6 0 0 K . Assuming that...
-
How much will a firm receive in net funding from a firm commitment underwriting of 250,000 shares priced to the public at $40 if a 10% underwriting spread has been added to the price paid by the...
-
Celestial Glass Company manufactures a variety of glass windows in its Charleston plant. In department I clear glass sheets are produced, and some of these sheets are sold as finished goods. Other...
-
An invoice received from a supplier for $5,000 on January 1 with terms 3/15, net 30 means that the company should pay a. $5,000 between January 4 and January 16. b. $4,850 before the end of January....
-
Terence Breezeway, the CEO of Prairie Home Stores, wondered what retirement would be like. It was almost 20 years to the day since his uncle Jacob Breezeway, Prairie Home's founder, had asked him to...
-
Cost of common stock equity CAPM J&M Corporation common stock has a beta, b,of 0.5. The risk-free rate is 5%,and the market return is 13%. a.Determine the risk premium on J&M common stock....
-
You now have $5000. You will toss a fair coin four times. Before each toss you can bet any amount of your money (including none) on the outcome of the toss. If heads comes up, you win the amount you...
-
On December 30, Billy's Boat Yard (BBY) had $90,000 of cash, $20,000 of liabilities, $30,000 of common stock, and $40,000 of unrestricted retained earnings. On December 31, BBY appropriated retained...
-
Describe the six key elements in organizational structure.Define the factors that affect organizational structure.Describe common organizational designs.Describe contemporary organizational design...
-
Why are bonds treated as retired during the consolidation process? What theoretical justification is used to support this accounting treatment? Please justify your answer, from a practical and also...
-
A software development firm is considering an investment of Rs. 600 lakhs in a new product line. The project is expected to generate the following cash flows over the next five years: Year Cash Flow...
-
A telecommunications company tracks its customer service, network maintenance, and equipment costs over three years. Year Customers Served Customer Service Cost Cost per Customer (Service) Network...
-
InnovateTech Inc. is evaluating the cost behavior of three types of costs across three months. Month Units Produced Total Cost TT Cost per Unit TT Total Cost UU Cost per Unit UU Total Cost VV Cost...
-
Unit 7 Quiz 2 Review 1. Is the distribution a valid probability distribution? Write yes or no. Name: x P(X) 1 0.11 2 0.25 3 0.4 4 0.13 5 0.31 A die is loaded in such a way that the probabilities of...
-
A copper rod of length L =18.0 in is to be twisted by torques T (see figure) until the angle of rotation between the ends of the rod is 3.08. (a) If the allowable shear strain in the copper is 0.0006...
-
Variable costs and differential costs mean the same thing. Do you agree? Explain.
-
Alpha and Beta are divisions within the same company. The managers of both divisions are evaluated based on their own divisions return on investment (ROI). Assume the following information relative...
-
Refer to the data in Exercise 16-2 for Weller Corporation. Data From Exercise 16-2 : Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31...
-
Inferring Values by Using the Statement of Earnings and Statement of Financial Position Equations LO1-1 Review the chapter explanations of the statement of earnings and the statement of financial...
-
Jerrys Taxis Ltd operates a taxi service in a large provincial city. All of the taxis are owned by the business and all the drivers are employees rather than owner drivers. The managers wish to...
-
Preparing a Statement of Earnings and a Statement of Financial Position LO1-1 Ducharme Corporation was organized by five individuals on January 1, 2020. At the end of January 2020, the following...
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App