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Allayers Company sells its special motorcycle screws that is manufactures at RM25 per unit. The company's total fixed manufacturing overhead is RM44,000 which is based on a production of 22,000 units per annum. The information for the financial year 2019 is as follows:

Allayers Company sells its special motorcycle screws that is manufactures at RM25 per unit. The company's total fixed manufacturing overhead is RM44,000 which is based on a production of 22,000 units per annum. The information for the financial year 2019 is as follows:

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Allayers Company sells its special motorcycle screws that is manufactures at RM25 per unit. The company's total fixed manufacturing overhead is RM44,000 which is based on a production of 22,000 units per annum. The information for the financial year 2019 is as follows: Production units 22,000 Sales units 18,900 Beginning inventory 3,300 Direct material and labour per unit RM14 Variable manufacturing overhead per unit Variable selling and administrative costs per unit Fixed selling and administrative expenses per annum RM4 RM2 RM20,000 Based on the information above, the accountant of the company has prepared absorption income statement as follows: Sales (at 18,900 units) RM472,500 Less: Cost of goods sold (RM378,000) Gross margin RM94,500 Less: Selling and administrative costs (RM57,800) Net operating profit RM36,700 Required: a. Calculate unit product cost under variable costing method. b. Redo income statement for the company by using variable costing method.
Transcribed Image Text:Allayers Company sells its special motorcycle screws that is manufactures at RM25 per unit. The company's total fixed manufacturing overhead is RM44,000 which is based on a production of 22,000 units per annum. The information for the financial year 2019 is as follows: Production units 22,000 Sales units 18,900 Beginning inventory 3,300 Direct material and labour per unit RM14 Variable manufacturing overhead per unit Variable selling and administrative costs per unit Fixed selling and administrative expenses per annum RM4 RM2 RM20,000 Based on the information above, the accountant of the company has prepared absorption income statement as follows: Sales (at 18,900 units) RM472,500 Less: Cost of goods sold (RM378,000) Gross margin RM94,500 Less: Selling and administrative costs (RM57,800) Net operating profit RM36,700 Required: a. Calculate unit product cost under variable costing method. b. Redo income statement for the company by using variable costing method.
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