A company manufactures and sells a single product X, t
A company manufactures and sells a single product X, the standard unit cost details of which are as follows:
Direct Materials: 2 Kilos at $5 per kilo
Direct labour: 2 hours at $3 per hour
Variable
The total fixed overhead is budgeted at $24 000 per month and is absorbed on a rate per unit basis.
The budgeted output per mont is 4 000 units.
The product has a standard selling price of $40 per unit, and the number of units manufactured and sold for June and July were as follows;
| June | July | |
| Units | Units | |
| Sales | 3 800 | 4 100 |
| Production | 3 900 | 4 200 |
Required:
(a) Calculate the
(b) Prepare the income statements for each June and July using Marginal costing and Absorption costing
(c) Prepare a statement reconciling the marginal with the absoroption profit for each June and July
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