managerial accounting Chapter 4

Question 1 Prepare marginal and absorption income statement based on the following information: Per unit: RM Selling price 45 Direct materials 11 Direct labour 8 Production overhead: Variable 4 Fixed Selling overhead: Variable Fixed Administration overhead: Fixed Fixed production overhead costs per unit are based on a normal monthly activity level of 8,000 units. These costs are expected to be incurred at a constant rate throughout the month. Activity levels during April and May are as follows: April May Sales (units) 7,000 8,750 Production (units) 8,500 7,750 There are no stocks held on 1 April. Scanned by TapScanner