ABC Ltd makes one product, with the following costs: variable direct materials £9 per unit, variable direct labour £6 per unit, fixed overheads £90,000 per year. During the last year the company made 7,500 units and sold 10,000 units for £25 each. There were 2, 500 finished units in inventory at the start of the year. The costs for the previous year were the same as above, and have been used to value the opening inventory. 7, 500 units were made last year. a ) Prepare the statements of profit or loss under absorption costing and marginal costing.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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ABC Ltd makes one product, with the following costs: variable direct materials £9 per unit,
variable direct labour £6 per unit, fixed overheads £90,000 per year. During the last year the
company made 7,500 units and sold 10,000 units for £25 each. There were 2,500 finished
units in inventory at the start of the year. The costs for the previous year were the same as
above, and have been used to value the opening inventory. 7, 500 units were made last year. a
) Prepare the statements of profit or loss under absorption costing and marginal costing.
Transcribed Image Text:ABC Ltd makes one product, with the following costs: variable direct materials £9 per unit, variable direct labour £6 per unit, fixed overheads £90,000 per year. During the last year the company made 7,500 units and sold 10,000 units for £25 each. There were 2,500 finished units in inventory at the start of the year. The costs for the previous year were the same as above, and have been used to value the opening inventory. 7, 500 units were made last year. a ) Prepare the statements of profit or loss under absorption costing and marginal costing.
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