Additional Information:

The value of the opening and closing inventory of the units produced is arrived at by using FIFO.

The budgeted and actual opening inventory for period 1 was 2,600 units and its valuation included $3,315 of fixed overheads.

The company absorbs its fixed overheads via a predetermined fixed overhead rate per unit which is calculated for each period.

It is assumed that variable costs per unit and selling prices per unit remained the same for each of the periods.

Tasks:

Since you are a motivated individual who is recently qualified and has just completed the CIMA qualification, inspiring for higher positions, Mr. Proud has asked you to carry out the following tasks and include them in your report:

a)Calculate the under or over recovery of fixed overhead for each period and indicate how it will affect the profit or loss.

Answer only part (a) with explanation

Task 2 - OMEGA Ltd. -Costing Calculations and Decision Making You have received the following budget and actual data that relates to OMEGA Ltd. for the past three periods from Mr. Prod Period1 10 000 8 000 10 400 GBP 19 170 GBP Period 3 12 200 12 400 17 360 GBP Period 2 14 000 Budget Sales (units) Production (units Fixed overheads 14 200 Actual Sales (units Production (units) Fixed overheads 9 600 8 400 11 200 GBP 18 320 GBP 12 400 13 600 10 200 9 200 16 740 GBP