Normal capacity is regarded as 180,000 units per year. Budgeted variable manufacturing costs are Rs.10 per unit.
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Question:
Normal capacity is regarded as 180,000 units per year. Budgeted variable manufacturing costs are Rs.10 per unit. Fixed factory overhead is Rs.315,000 per year. Variable selling expenses are Rs.4 per unit and fixed selling expenses are Rs.260,000 per year. The selling price is Rs.22 per unit.
Operating results for 1990 are: sales, 160,000 units; production, 170,000 units; there were no beginning inventories.
REQUIRED:
A.Prepare 1990 income statement using absorption costing.
B.Prepare 1990 income statement using variable costing.
C.Reconcile the results.
Expert Answer:
A Preparing the 1990 income statement using absorption costing Sales 160000 units Rs22 Rs3520000 Cos... View the full answer
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