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A firm manufactures and sells single product only which sells for Rs 50 per unit. There were no stocks at the end of August and

A firm manufactures and sells single product only which sells for Rs 50 per unit. There were no stocks at the end of August and other information is as follows.

Standard cost per unit

Rs

Direct material

18

Direct wages

4

Variable production overhead

3

Budgeted and actual costs per month

Fixed production overhead

99,000

Fixed selling expenses

14,000

Fixed administration expenses

26,000

Variable selling expenses

10% of sales value

Normal capacity is 11,000 units per month. The number of units produced and sold was:

September

Units

October

Units

Production

14,000

10,200

Sales

12,800

11,000

Required: Prepare P&L statement for the September and October applying:

  1. Marginal Costing

2. Absorption Costing

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