variable cost

12marks

Anagram Ltd is in the manufacturing business; the organisation maintains a variable cost accounting statement for its internal purpose, which helps them take financial decisions and with financial planning. During the financial year 2020-21, the organisation has made total sales of 900,000, from sales of 4,000 units. The cost details are as follows: Amount (E) Cost of Materials Purchases 150,000 Labour cost 120,000 Production Overheads 200,000 Sales Overheads 100,000 Rent 140,000 Fixed Salaries 310,000 Repairs 30,000 Interest Cost 40,000 30% of production overheads are fixed in nature and 25% of variable overheads are fixed in the nature. Required: (a) Prepare the Variable Cost income statement for Anagram Ltd for the 2020-21 financial year