Question #2 (CLO 2) 32marks

At the end of March 2022, there were 700 units of a product manufactured by Textiles Limited. The company has a budgeted capacity of 9,000 units and during the month, one unit of the product was sold for $840. Production and sales for the month amounted to 4,800 units and 8,500 units respectively. Administrative, selling and production overheads were estimated at $200,000, $270,000 and $540,000 respectively. The following information relating to the product was also extracted from the financial records:

Cost per unit

Details	$
Direct materials	300
Direct labour	200
Variable overheads	120
Total	620

Required:

Determine the amount of stock in store at the start of the month. (2 marks)

Calculate the full cost per unit of production for March 2022. (2 marks)

Prepare an income statement for the month using Marginal Costing. (12 marks)

Prepare an income statement for the month using Absorption Costing. (14 marks)

Prepare a reconciliation of the profits using the above costing methods (2 marks)