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Geliga Sdn. Bhd. manufactures spare parts for speakers called GP Speak. The selling price per unit of GP Speak is RM45 and fixed manufacturing overheads
Geliga Sdn. Bhd. manufactures spare parts for speakers called GP Speak. The selling price per unit of GP Speak is RM45 and fixed manufacturing overheads are absorbed based on normal activity level. The following data relates to the product for 2020. RM50,000 RM20,000 RM10.00 RM16.00 Fixed manufacturing overhead per annum Fixed selling and administrative expenses per annum Direct material cost per unit Direct labour cost per unit Variable selling and administrative expenses per unit Normal production level Actual production level Units sold RM2.00 5.000 units 7,000 units 6,500 units Beginning inventory Nil Required: a. Determine the ending inventory for 2020. (2 marks) b. Calculate manufacturing cost per unit under absorption costing and variable costing approach. (4 marks) c. Prepare an income statement for Geliga Sdn. Bhd. using variable costing approach and absorption costing approach. (14 marks) d. Compare the operating income obtained from both methods and explain the reasons for the differences
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