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Workshop 9 Chapter 9 Marginal and Absorption Costing (10 of 12) Open in Office a G 2) Merbuk Sdn Bhd makes and sells one product,

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Workshop 9 Chapter 9 Marginal and Absorption Costing (10 of 12) Open in Office a G 2) Merbuk Sdn Bhd makes and sells one product, which has the following standard variable production costs per unit. RM Direct materials cost (2kg @RM25 per kg) 50 Direct labour cost (3 hours @ RM40 per hr) 120 Variable production overhead costs (RM10 per labour hour) 30 The budgeted selling price per unit is RM400 for the coming two years. The production and sales budgets for the next two years are as follows: 2020 2021 Production in units 50,000 60,000 Sales in units 40,000 70,000 There is no opening inventory at the beginning of 2020.Budgeted fixed production overhead costs are RM20 per unit, and they are absorbed based on a normal production level of 54,000 units per annum. The budgeted non- production costs for the next two years are as follows: Variable non production overhead costs RM10 per unit sold Fixed non production overhead costs per annum RM2,000,000 Required : Prepare the budgeted operating statements for each of the coming two years using absorption and marginal costing systems. inter

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