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Question A2 Europe Company Limited produces and sells harddisk. The following data refer to the year just completed: Units Beginning inventory Produced Sold 68,000 54,000
Question A2 Europe Company Limited produces and sells harddisk. The following data refer to the year just completed: Units Beginning inventory Produced Sold 68,000 54,000 Net operating income under variable costing is $3,800,000. Fixed manufacturing overhead incurred for the above production process totalled $272,000. Required: (a) Compute the units which make the difference in the two systems (Variable costing and Absorption costing). (1 mark) (b) Compute the manufacturing overhead cost per unit which makes the difference in the two systems. (1 mark) (c) Use vertical 1 column and 3 rows schedule to compute the variances between the variable costing and absorption costing net operating income figures. (4 marks) Page 3 of 11
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