Question
Deniz Ltd makes a single product and produces management accounts, including a costing statement of profit or loss each month. In both May and June,
Deniz Ltd makes a single product and produces management accounts, including a costing statement of profit or loss each month. In both May and June, 320,000 units of the product were produced. The production costs in both May and June were:
Type of Costs | Amount |
Direct materials: | 992,000 |
Direct labour: | 1,376,000 |
Fixed overheads: | 650,000 |
Total production costs: | 3,018,000 |
There were no opening inventories at the start of May and all of the production for May was sold. However, in June, only 305,000 units of production were sold, leaving 15,000 units in inventory. Each unit is sold for 14.75. Complete a simple statement of profit or loss, under absorption and marginal costing principles for the months of May and June.
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