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has no 4.80 2.00 1.20 1200 units 198azn QUESTION 1 At the start of period one Tommy opening inventories. Tommy sells his product for 12
has no 4.80 2.00 1.20 1200 units 198azn QUESTION 1 At the start of period one Tommy opening inventories. Tommy sells his product for 12 per mit incurring the following uit Variable Direct materials Direct labour Variable Production overheads Fized production overheads are 3,000 fized selling overheads are 1,000, and production and sales are as follows: Pd1 Pd 2 Sales 1800 units Production 1400 units 1600 units Overhead absorption rates are calculated based on budgeted production of 1500 units. Required: a) Prepare profit statements using marginal Casting b) Prepare profit statements using absorption Casting c) Explains why the profit figures differ using different methods. d) Explain why the adjustment is necessary for under and over absorption of overheads in the absorption Costing model. b) Required: a) Produce a profit statement for the year endring 31 December 2018, assuming actual Sales are 12,000 lumits. b) Calculate the break-even point for the year ending 31 December 2012 and the margin of safety expressed as a percentage of the Original budgeted sales C) Calculate the revised break even point if a new wage settlement mereases direct labour costs by 20 % d) Assuming sales 10,000 units are achieved and Hve now wage settlement is never agreed Calculated the selling Price per unit that would earn a total profit of 500,000. e) Discuss the hmitations of breakeveu analysis
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