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A company manufactures and sells a single product. Budgeted data per unit of the product is: R Selling Price 8 . 5 0 Variable Cost
A company manufactures and sells a single product. Budgeted data per unit of the product is: R Selling Price Variable Cost Fixed Production overhead All variable costs are manufacturing ie there are no nonmanufacturing variable costs. The above fixed production overhead absorption rate is based on budgeted production of units per period. Budgeted nonproduction overhead all fixed is R per period. Actual sales and production for two periods has been: Period Period Sales units units Production units units There was no stock at the start of Period The selling price, unit variable costs and total fixed costs were as per budget in both periods. REQUIRED Prepare statements of Comprehensive income for both periods ie period & Period using absorption costing, showing the actual results for each of the two periods. The company wishes to compare the results reported in above with those that would be reported using marginal costing. Prepare the statement of comprehensive income for periods ie period & Period using marginal costing, showing the actual results for each of the two periods. Explain fully why the profits reported in period differ when profit is calculated using absorption costing and marginal costing. Calculations are required to support your explanation. A company manufactures and sells a single product. Budgeted data per unit of the product is: table
A company manufactures and sells a single product. Budgeted data per unit of the product is:
R
Selling Price
Variable Cost
Fixed Production overhead
All variable costs are manufacturing ie there are no nonmanufacturing variable costs.
The above fixed production overhead absorption rate is based on budgeted production of units per period.
Budgeted nonproduction overhead all fixed is R per period.
Actual sales and production for two periods has been:
Period Period
Sales units units
Production units units
There was no stock at the start of Period The selling price, unit variable costs and total fixed costs were as per
budget in both periods.
REQUIRED
Prepare statements of Comprehensive income for both periods ie period & Period using absorption costing,
showing the actual results for each of the two periods.
The company wishes to compare the results reported in above with those that would be reported using
marginal costing.
Prepare the statement of comprehensive income for periods ie period & Period using marginal costing,
showing the actual results for each of the two periods.
Explain fully why the profits reported in period differ when profit is calculated using absorption costing and
marginal costing. Calculations are required to support your explanation.
A company manufactures and sells a single product. Budgeted data per unit of the product is:
table
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