REQUIRED

Prepare the Income Statement of Waltons Manufacturers for the month ended 28 February 2021

using the absorption costing method.

INFORMATION

The following forecasts were obtained from the accounting records of Waltons Manufacturers for

the month ended 28 February 2021:

Inventory on 01 February 2021 Nil

Production 25 000 units

Sales 23 000 units

Selling price per unit R100

Manufacturing costs:

Fixed manufacturing costs R240 000 per month

Variable manufacturing costs per unit R42

Marketing costs:

Sales personnels salaries and advertising R40 000 per month

Delivery costs R5 per unit sold

Administration costs:

Salaries R50 000 per month

Other office costs R4 per unit sold