Question
Ebby Co. Ltd had the following information for four (4) periods. N (per unit) Selling price 240 Variable costs: Direct materials 60 Direct labour 40
Ebby Co. Ltd had the following information for four (4) periods. N (per unit) Selling price 240 Variable costs: Direct materials 60 Direct labour 40 Production overheads 20 Selling and admin. 20 Fixed costs from standard production capacity of 20,000 units are: Production N400,000 Selling and Administration N600,000 Output and sales in units are given below: Periods 1 2 3 4 Opening stock Production Sales Closing stock Required: 6,000 20,000 24,000 2,000 2,000 24,000 18,000 8,000 8,000 18,000 20,000 6,000 6,000 22,000 24,000 4,000 a) Prepare the operating statement for Nile Manufacturing Ltd using marginal costing and absorption costing. [35 marks] b) Discuss three (3) uses of marginal costing in relation to (a) above.
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