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QUESTION 6 MAX co makes a product, the Jade, which has a variable production cost of $6 per unit and a sales price of $10
QUESTION 6 MAX co makes a product, the Jade, which has a variable production cost of $6 per unit and a sales price of $10 per unit. At the beginning of September 2018, there were no opening inventories and production during the month was 20,000 units. Fixed costs for the month were $45,000 (production, administration, sales and distribution). There were no variable marketing costs. Required: (a) Calculate the contribution and profit for September 2018, using marginal costing principles, if sales were as follows: (i) 10,000 Jades (6 Marks) (ii) 15,000 Jades (6 Marks) (iii) 20,000 Jades. (6 Marks) (b) What are the differences between marginal and absorption costing? (7 Marks) (TOTAL = 25 MARKS)
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