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Madinare is planning to produce a new product called GTY which will be used in the construction industry. This selling price per unit of this

Madinare is planning to produce a new product called GTY which will be used in the construction industry. This selling price per unit of this product will be P340.00.
The following are the unit costs of GTY:
Direct materials:
1 container P10.00; Chemical PN 3 kgs at P10.00 per kg; Chemical QS 4 kgs at P17.50 per kg
Direct labour: 15 minutes at P80 per hour
Variable factory overhead: Absorbed at P140 per direct labour hour
Fixed factory overhead: P30,400.00 for the half year to June 2024. To be absorbed at a rate per unit.
Sales commission per each unit sold P10.00
Fixed administrative costs will be P25,000.00 per annum.
The expected production and sales for the 6 months ended 30 June 2024 will be:
Production 380 Units
Sales 365 units, meaning 15 units of GTY will remain as closing inventory
i) Using marginal costing, showing all your workings, prepare a detailed income statement (Statement of profit or loss account) for the half year to 30 June 2024
ii) Briefly explain any two weaknesses of using marginal costing
b) You have just received an email from the Chief Accountant (Mekki) who now believes that fixed factory overhead costs of P30,400 is in fact a stepped fixed cost, and will change at each activity level of 2000 units.
i) You are to elaborate your understanding of stepped fixed costs
ii) You are also required to explain the effect of the above information on the cost per GTY unit at activity levels of 1,400 and 1,800 units.
c) Edmore and Company has produced a standard cost card for its single product. The standards are given below:
Selling price per unit: P118.00
Direct materials per unit: P21.00
Direct labour per unit: P80.00
Profit: P12.00
For January 2024, the budgeted production and sales were 8,000 units, while the actual sales were 6,000 units.
You are required to find the flexed budget profit for January 2024.

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