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F 1 . 1 Prepare statements of Comprehensive income for both periods ( ie period 1 & Period 2 ) , using absorption costing, A

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F 1.1 Prepare statements of Comprehensive income for both periods (ie period 1 & Period 2), using absorption costing, A company manufactures and salls a single product. Budgated data per unit of the product is:
'All variable costs are manufacturing i.e there are no non-manufacturing variable costs.
The above fixed production overhead absorption rate is based on budgeted production of 12,000 units per period.
Budgeted non-production overhead (all fixed) is R16,800 per period.
Actual sales and production for two periods has been:
There was no stock at the start of Period 1. The selling price, unit variable costs and total fixed costs were as per
budgat in both periods.
showing the actual results for each of the two periods. (7)
The company wishes to compare the results reported in (1.1) above with those that would be reported using
marginal costing.
1.2 Prepare the statement of comprehensive income for periods (ie period 1 & Period 2), using marginal costing,
showing the actual results for each of the two periods. (7)
1.3 Explain fully why the profits reported in period 1 differ when profit is calculated using absorption costing and
marginal costing. Calculations are required to support your explanation.
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