Question No. 1 (30 Marks)

Al Qasim Traders began their operation on 1^st January 2019. Following details related to their operations for the period ended Dec 31^st 2019 are provided below:

Omani Rials

Direct Material Cost per unit 15

Direct Labour Cost per unit 25

Variable Production Overhead per unit 30

Fixed Production Overhead (Capacity 5000 units) 75000

Variable Selling and General Expenses 20000

Fixed General and Selling Expenses 15000

Al Qasim Traders produced 4000 units during 2019 but could sell only 3700 units at Omani Rials 100 per unit.

Required:

1. Calculate cost per unit under Marginal and Absorption costing assumptions. (7 Marks)
2. Prepare Statement of Profit & Loss under Marginal Costing Assumption. (10 Marks)
3. Prepare Statement of Profit & Loss under Absorption Costing Assumption. (10 Marks)
4. Prepare Profit Reconciliation Statement. (3 Marks)