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1. XYZ limited produces chairs. Each chair is required have the following costs per unit. Particulars: Cost per unit: Materials 125 Labor 8S Variable manufacturing
1. XYZ limited produces chairs. Each chair is required have the following costs per unit. Particulars: Cost per unit: Materials 125 Labor 8S Variable manufacturing overheads 58 Variable selling cost 18 Selling price 355 There is also a fixed selling cost of 20,000$ per month. Fixed manufacturing overheads are budgeted at 20,000$ per month and average production is estimated to be 10,000 units per month During the first 2 months, XYZ expects the following levels of activity. January February Production 11,000 units 9,500 units Sales 9,000 units 11,500 units Required: Prepare a cost card under both Marginal and absorption costing Methods and reconcile the profits. (20 mks)
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