The following information is summarized from the preliminary budget of Hamilton Limited for product EE01. Budgeted costs and revenues are based on a normal volume of 100,000 units for the year. Capacity is 120,000 units. There are no beginning inventories.

During the year, 100,000 units were produced and 70,000 units were sold. There were no flexible budget variances for manufacturing, selling, and general expenses, and no sales price variance.
REQUIRED
A. What amount of profit or loss for product EE01 would Hamilton Limited record for the year, assuming they use standard variable costing?
B. What amount of profit or loss for product EE01 would Hamilton Limited record for the year, assuming they use standard absorption costing?

Transcribed Image Text:

Total Per Unit $7,200,000 Budgeted revenue Budgeted costs: Raw materials Direct labour Variable overhead Fixed overhead Variable selling and general Fixed selling and general Total budgeted costs Budgeted income $72 900,000 1,200,000 1,500,000 1,800,000 600,000 600,000 6,600,000 9 12 15 18 6 6 $ 6