2. Big Woof Co manufactures a single product, the Bark, details of which are as follows. Per unit Selling price Direct materials Direct labour Variable overheads Annual fixed production overheads are budgeted to be $1.6 million and Big Woofexpects to produce 1,280,000 units of the Bark each year. Overheads are absorbed on a per unit basis. Actual overheads are $1.6 million for the year. Budgeted fixed selling costs are $320,000 per quarter. Actual sales and production units for the first quarter of 2020 are given below. Sales Production 180.00 40.00 16.00 10.00 (a) Marginal costing (b) Absorption costing January-March 240,000 280,000 There is no opening inventory at the beginning of January. Prepare income statements for the half year, using
2. Big Woof Co manufactures a single product, the Bark, details of which are as follows. Per unit Selling price Direct materials Direct labour Variable overheads Annual fixed production overheads are budgeted to be $1.6 million and Big Woofexpects to produce 1,280,000 units of the Bark each year. Overheads are absorbed on a per unit basis. Actual overheads are $1.6 million for the year. Budgeted fixed selling costs are $320,000 per quarter. Actual sales and production units for the first quarter of 2020 are given below. Sales Production 180.00 40.00 16.00 10.00 (a) Marginal costing (b) Absorption costing January-March 240,000 280,000 There is no opening inventory at the beginning of January. Prepare income statements for the half year, using
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:2. Big Woof Co manufactures a single product, the Bark, details of which are as follows.
Per unit
Selling price
Direct materials
Direct labour
Variable overheads
Sales
Production
S
180.00
Annual fixed production overheads are budgeted to be $1.6 million and Big Woofexpects to produce
1,280,000 units of the Bark each year. Overheads are absorbed on a per unit basis. Actual overheads
are $1.6 million for the year. Budgeted fixed selling costs are $320,000 per quarter.
Actual sales and production units for the first quarter of 2020 are given below.
40.00
16.00
10.00
(a) Marginal costing
(b) Absorption costing
January-March
240,000
280,000
There is no opening inventory at the beginning of January. Prepare income statements for the
half year, using
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