Accounting

QUESTION 3 Mira Maju Bakery makes and sells a single product, ginger flavoured cookies known as Gingersnaps. The budgeted selling price of the product is RM85 per box and budgeted costs at normal production of 25,000 boxes per annum are as follows: Direct material Direct labour Brown sugar Flour Production overhead Variable sellin overhead Administrative overhead 75,000 50 ooo 225 ooo 225,000 50,000 50,000 Included in the production overhead cost per box is the fixed production overhead of RM4.OO per box. The fixed production overhead cost per box is based on normal annual production level of 25,000 boxes. These costs are expected to be incurred at a constant rate throughout the year. Fixed selling overhead amounted to RM15,000 per quarter. All administrative overhead is considered as fixed cost. The company's activity levels during the second and third quarter of the year are expected to Second Quarter Third Quarter Sales boxes Production boxes There is no opening stock for the second quarter. Required: 6 ooo 7 ooo 6,500 6 ooo a. Prepare the Statement of Profit or Loss for the third quarter using: i. The marginal costing approach ii. The absorption costing approach