God-Is-Good Company produces a single product, the following figures were extracted from their records for the year ended December 31, 2020.

Units in beginning inventory: direct material (1,000 units) : direct labour

GH30.00 GH65.00 GH35.00 GH32.00

12,500 units GH425.00 per unit

GH50.00 GH100.00 GH60.00 GH25.00

525,350.00 315,500.00

Units produced

Units sold (10,000 units)

Variable costs per unit:

Direct materials

Direct labour

Variable overhead

Fixed overhead per unit produced

General and administrative cost (60% variable) Selling and distribution cost (40% fixed)

: variable overhead : fixed overhead

a. Prepare an Income Statement for God-Is-Good Company using the full costing approach.

(10 marks)

b. Prepare an Income Statement for God-Is-Good Company using variable costing approach.

(10 marks)

c. Prepare the Reconciliation Statement (4 marks)

d. One important aspect of overall material management is the inventory control. Required; discuss the two problems associated with inventory control. (6 marks)

Question One God-Is-Good Company produces a single product, the following figures were extracted from their records for the year ended December 31, 2020. Units in beginning inventory: direct material (1,000 units) GH30.00 : direct labour GH65.00 : variable overhead GH35.00 : fixed overhead GH32.00 Units produced 12,500 units Units sold (10,000 units) GH425.00 per unit Variable costs per unit: Direct materials GH50.00 Direct labour GH100.00 Variable overhead GH60.00 Fixed overhead per unit produced GH25.00 General and administrative cost (60% variable) 525,350.00 Selling and distribution cost (40% fixed) 315,500.00 a. Prepare an Income Statement for God-Is-Good Company using the full costing approach. (10 marks) b. Prepare an Income Statement for God-Is-Good Company using variable costing approach. (10 marks) c. Prepare the Reconciliation Statement (4 marks) d. One important aspect of overall material management is the inventory control. Required; discuss the two problems associated with inventory control. (6 marks) TOTAL: 30 MARKS