Exe operates an integrated accounting system and prepares its final accounts monthly.

Production overhead: absorbed at 150 per cent of direct wages Gross profit: calculated at 16^2/3 per cent of selling price Budgeted output: 10,000 units per week.
You are required to:

(a) Calculate the appropriate variances for October;

(b) Show the accounts for October as they would be expected to appear in the ledger;

(c) Prepare a profit and loss statement for October, together with a balance sheet as at the end of that month.

Transcribed Image Text:

Balances as at 1 October: Issued share capital 000 1,500 Profit and loss balance 460 Freehold buildings 1,000 Plant and machinery, at cost 500 Plant and machinery: depreciation provision 300 Motor vehicles, at cost 240 Motor vehicles: depreciation provision 80 10% Debentures 240 Creditors (materials) 144 Creditors (expenses) Stock: raw materials Wages payable Debtors Bank Stock: finished goods 36 520 40 246 162 132