Question One

God-Is-Good Company produces a single product, the following figures were extracted from their records for the year ended December 31, 2020.

Units in beginning inventory: direct material (1,000 units)	GH30.00
: direct labour	GH65.00
: variable overhead	GH35.00
: fixed overhead	GH32.00
Units produced	12,500 units
Units sold (10,000 units)	GH425.00 per unit
Variable costs per unit:
Direct materials	GH50.00
Direct labour	GH100.00
Variable overhead	GH60.00
Fixed overhead per unit produced	GH25.00
General and administrative cost (60% variable)	525,350.00
Selling and distribution cost (40% fixed)	315,500.00

1. Prepare an Income Statement for God-Is-Good Company using the full costing approach.

(10 marks)

2. Prepare an Income Statement for God-Is-Good Company using variable costing approach.

(10 marks)

c. Prepare the Reconciliation Statement (4 marks)

d. One important aspect of overall material management is inventory control.

Required; discuss the two problems associated with inventory control. (6 marks)