Question #$3$

One of the products that are manufactured by Blooming Ltd is ZP$11.$ The company has a budgeted capacity of $6,000$ units per month and monthly fixed production expenses relating to this product are estimated at $$360,000.$ At the start of January $2022$ the company had in store $400$ units of the product. During January $2022$ the company sold $5,500$ units and closing stock was $300$ units. Administrative and selling expenses for the month of January $2022$ were estimated at $$500,000$ and $$250,000$ respectively. The following information was also taken from the company$$s records for the month of January $2022$:

Cost per unit

Details $

Direct materials $200$

Direct labour $250$

Direct expense $0$

Variable overheads $100$

$550$

Selling price per unit $$1,300$

Required:

$($a$)$ Calculation production in units for January $2022.$

$($b$)$ The marginal$/$variable cost per unit.

$($c$)$ The full cost per unit.

$($d$)$ Profit results using marginal costing for January $2022.$

$($e$)$ Profit results using absorption costing for January $2022.$

$($f$)$ Reconcile the difference in profit obtained under both costing methods.