Playtime Ltd produces jigsaws for sale in model shops. The following information relates to the sales and
Question:
Playtime Ltd produces jigsaws for sale in model shops. The following information relates to the sales and costs of producing the jigsaws. Selling price per unit is £20 Variable cost per unit is £10 Fixed costs of the period are £800 Volumes of production and sales are as follows for periods 1, 2 and 3.
Required
(a) Using absorption costing, what is the profit of Period 2?
(b) Using marginal costing what is the profit of Period 2?
(c) Compare the profit of Period 1 under absorption costing with that calculated under marginal costing and explain the difference.
(d) Using absorption costing, calculate the value of closing stock at the end of Period 1.
(e) Using marginal costing, calculate the value of closing stock at the end of Period 1.
Step by Step Answer:
To address each part of this question accurately I will need to go through the calculations for both absorption costing and marginal costing methods H...View the full answer
