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Faisal Company is a small business which has the following marginal costing profit and loss account for the month ended June 2016. Rs. Rs. Sales
Faisal Company is a small business which has the following marginal costing profit and loss account for the month ended June 2016.
Rs. Rs.
Sales 96,000
Cost of sales:
Opening Finished goods 6,000
Production Cost (Material + Labour + FOH) 72,000
Closing Finished goods (14,000) (64,000)
Gross contribution margin 32,000
Other variable cost-Selling expense (6,400)
Contribution margin 25,600
Fixed cost:
Factory Overhead 8,000
Administration 9,600 (17,600)
Net profit 8,000
Cost per unit is:
Rs.
Direct material 16
Direct labour 18
Variable factory overhead 6
Budgeted selling price per unit is Rs.60
The companys normal level of activity is 4,000 units per month. It has a fixed production costs at Rs.8,000 per month and absorbed them on the normal level of the activity of units produced.
Required:
Calculate following throught absorption costing
Sold: units
Production units
Direct Material
Direct Labour
Variable Overhead
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