Accounting

Rihanna is manufacturing 3 types of furniture. Relevant costing method can be used for pricing the furniture. Fixed cost or sunk cost is need to be ignored as they don't play any role for decision making. Particular Type A Type B Type C Material 50kg 70kg 90kg Price of material per kg 20(price xkg) 1000 1400 1800 Labour hour 24 30 40 Rate for labour per hour 25(labour hourxrate per hour) 600 1500 1000 1080 1500 1600 Machine overhead absorbed on the basis of direct labour hour (45x24) (30x50) (40x40) Fixed overhead 0 0 0 Relevant cost per piece 2680 4400 4400 Demand for product 200 400 120 As per relevant costing method price should be 2680 for furniture A,4400 for furniture B and C. Required: a. Having made the choice of pricing method in (a) above, calculate the selling price and show the statement of profit and loss for the month of August (12 Marks). Rihanna is manufacturing 3 types of furniture. Relevant costing method can be used for pricing the furniture. Fixed cost or sunk cost is need to be ignored as they don't play any role for decision making. Particular Type A Type B Type C Material 50kg 70kg 90kg Price of material per kg 20(price xkg) 1000 1400 1800 Labour hour 24 30 40 Rate for labour per hour 25(labour hourxrate per hour) 600 1500 1000 1080 1500 1600 Machine overhead absorbed on the basis of direct labour hour (45x24) (30x50) (40x40) Fixed overhead 0 0 0 Relevant cost per piece 2680 4400 4400 Demand for product 200 400 120 As per relevant costing method price should be 2680 for furniture A,4400 for furniture B and C. Required: a. Having made the choice of pricing method in (a) above, calculate the selling price and show the statement of profit and loss for the month of August (12 Marks)