Question (CLO 2) 30 marks

Zurich International Ltd manufactures a single product. For the month of December 2021, the company sold 6,000 units of the product at $650 each. On December 01, 2021 there were 460 units in store, while on December 31, 2021 inventory on hand was counted to be 650 units. The company has a budgeted capacity of 6,800 units. The following table shows cost information for the product that was extracted from the companys accounting records.

Cost per unit

Details	$
Direct materials	90
Direct labour	80
Direct expense	20
Production overheads	60
	250

Administrative and selling overheads for December 2021 were budgeted at $340,000 and 480,000 respectively. The companys records also revealed that forty-five percent (45%) of the production overheads were fixed.

Required

Prepare the income statement showing profit for December using marginal costing techniques. (11 marks)