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1 QVC Company produces kitchen cabinets at its factory. The following relates to the production of the kitchen cabinets for the period ending December 2020.
1 QVC Company produces kitchen cabinets at its factory. The following relates to the production of the kitchen cabinets for the period ending December 2020. Budgeted Actual Production (units) 75,000 80,000 Sales (units) 72,500 77,500 Fixed production cost $750,000 $781,250 $562,500 $562,500 Fixed Selling overhead The fixed production overhead was absorbed at a pre- determined rate per unit produced. Each kitchen cabinet was sold for $450. At the beginning of January 2020, there was opening stock of 4,375 units valued at $262,500; this includes fixed production overhead of $43,750. Required: b) Prepare an absorption costing income statement for the company as at December 31, 2020 (8 marks) c) Prepare the reconciliation statement as at December 31, 2020. (5 marks) Total 20 marks
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