Prepare the budgeted Income Statement of Voltex Limited for the year ended 30 June 2018 using the:

2.1

Variable costing method

(10 marks)

2.2

Absorption costing method.

(10 marks)

INFORMATION

The following information was extracted from the budgeted figures provided by Voltex Limited, a manufacturer of golf carts, for the year ended 30 June 2018.

Inventory at the beginning of the year (units)

0

Production for the year (units)

500

Sales for the year (units)

450

R

Selling price per unit

3 000

Variable manufacturing costs per unit:

Direct materials

700

Direct labour

300

Overheads

170

Variable selling and administrative costs per unit sold

130

Fixed manufacturing costs

600 000

Fixed selling and administrative costs

200 000

ADDITIONAL INFORMATION

The company uses the first-in-first-out method for the valuation of inventories.