Part C focus.

QUESTION 2 Bolte Manufacturing operations for 2017 are as follows: $ Per unit: Sales price Direct material cost 50 18 4 3 Direct wages Variable production overhead Per month: Fixed production overhead Fixed selling expenses Fixed administration expenses 99 000 14 000 26 000 Variable selling expenses is 10% of sales value. Normal capacity was 11 000 units per month. March April January Units February Units units Units Sales 12 000 10 000 16000 14000 12 000 10 000 8000 Production 6000 Using the two methods: A. Compute the unit production cost (4 marks) B. Determine the value of the closing inventory marks) C. Prepare the Marginal Income Statement and the Absorption Income Statement for March and April (22 marks) D. Reconcile the net profits for March and April (3 marks) E. Comment on the differences of the two systems with respect to: i. Stock valuations (2 marks) ii. Period profits (2 marks) Bolte Manufacturing Operations Marginal Income Statement for March and April 2017 Variable Costing January February March April Units Units Units Units 10,000 12,000 14,000 16,000 Less Marginal cost of Sales January February Units Units March units April Units Sales Production 10 000 12 000 12 000 10 000 14000 8000 16000 6000 QUESTION 2 Bolte Manufacturing operations for 2017 are as follows: $ Per unit: Sales price Direct material cost 50 18 4 3 Direct wages Variable production overhead Per month: Fixed production overhead Fixed selling expenses Fixed administration expenses 99 000 14 000 26 000 Variable selling expenses is 10% of sales value. Normal capacity was 11 000 units per month. March April January Units February Units units Units Sales 12 000 10 000 16000 14000 12 000 10 000 8000 Production 6000 Using the two methods: A. Compute the unit production cost (4 marks) B. Determine the value of the closing inventory marks) C. Prepare the Marginal Income Statement and the Absorption Income Statement for March and April (22 marks) D. Reconcile the net profits for March and April (3 marks) E. Comment on the differences of the two systems with respect to: i. Stock valuations (2 marks) ii. Period profits (2 marks) Bolte Manufacturing Operations Marginal Income Statement for March and April 2017 Variable Costing January February March April Units Units Units Units 10,000 12,000 14,000 16,000 Less Marginal cost of Sales January February Units Units March units April Units Sales Production 10 000 12 000 12 000 10 000 14000 8000 16000 6000