Nananom Ltd, produces high-quality designer bricks that they sell for GHS 10 each for the real estate sector in Ghana.

For the year ended 2020, the company incurred the following costs:

Variable costs per unit:

Direct materials GHS 2.0

Direct labor GHS 1.0

Variable manufacturing overhead GHS 1.5

Variable selling and administrative overhead GHS 0.5

Fixed costs per year:

Fixed manufacturing overhead GHS 100,000

Fixed selling and administrative overhead GHS 50,000

During the year, the company produced 1 million bricks and sold only 900,000. Given that there were no bricks in inventory at the start of the year, do the necessary computations to answer the following questions.

a) find unit cost of brick under absorbtion costing

b) what is the unit cost of break under variable costing

c)what is the contribution margin of this product for the year

d)what is the gross profit from the sale of product for the year

e)what is the operating income from the absorption approach

d) what is the operating income from the variable costing approach

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