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1. (a) Data collected from the books of the company for the year ended 31/12/2020 are as follows: Units produced 10,000 units Units sold $9,500
1. (a) Data collected from the books of the company for the year ended 31/12/2020 are as follows: Units produced 10,000 units Units sold $9,500 Selling price per unit $25 Direct material cost $80,000 Direct wages $60,000 Production overhead costs: Fixed cost $10,000 Variable cost $30,000 Selling and distribution overheads: Fixed cost $15,000 Variable cost $ 2 per unit (I) Compute the production cost per unit using: (a) Absorption costing 3 Marks (b) Marginal costing 3 Marks (II) Prepare the profit and loss account for the year ended 31/12/2020, using: (a) Absorption costing 5 Marks (b) Marginal costing 5 Marks (III) Explain the difference in profit disclosed by the two methods. 4 Marks 1. (b) Domond is a manufacturing company that produces one standard type of production. The following information relates to the company. $ Variable cost per unit 800 Selling price per unit 1,200 Total fixed cost 240,000 Required: (a) Calculate: (i) The break-even point in units 3 Marks (ii) The sales value at break-even point 3 Marks (iii) The C/S ratio 3 Marks (iv) The quantity of goods to be sold by the company in order to make a profit of $60,000 3 Marks (v) The value of sales that will result in a profit of $60,000 3 Marks (b) Prepare a statement of profit showing the profit of the company where the quantity in (iv) above is produced. 5 Marks
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