Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 3 (30 marks) Stars Ltd. produces computers. Managers of Stars Ltd. estimate to produce 400 computers and estimate to have total overheads of

image text in transcribed

Question 3 (30 marks) Stars Ltd. produces computers. Managers of Stars Ltd. estimate to produce 400 computers and estimate to have total overheads of 200,000. The actual production level was 20% higher than estimated and the actual fixed production overheads equal 210,000. The fixed non-production costs equal 12,000. Stars Ltd. sells 200 computers for a price of 1,500 per unit. The variable production cost per unit is 100. The opening stock of computers for Stars Ltd. equals 300 computers. Required: a) Generate the profit statement using the marginal costing technique. (6 marks) b) Generate the profit statement using the absorption costing technique. c) Explain the differences between both profit statements. (14 marks) (5 marks) d) Which can be the reasons for the differences between the absorbed overheads and the actual overheads? (5 marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Principles

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

10th Edition

1119491630, 978-1119491637, 978-0470534793

More Books

Students also viewed these Accounting questions

Question

The script uses magic numbers instead of 'first' and 'last'.

Answered: 1 week ago