Bennett's Manufacturing started business on 1 JUNE 2016, and incurred the following costs during its first two years. Year ending 31 March Direct materials Direct labour Variable overheads Fixed costs Production each year (units) Sales each year (units) Selling price for 2016 $50 Selling price for 2017 S60 20,000 and 16,000 17,000 and 16,000 2016 S 2017 $ 120,000 80,900 80,000 55,000 50,000 35,000 60,000 50,600 Required: A. Prepare a statement showing the gross profit for each of the three years if the company used: The marginal costing approach to valuing inventory: The absorption costing approach to valuing inventory. •
Bennett's Manufacturing started business on 1 JUNE 2016, and incurred the following costs during its first two years. Year ending 31 March Direct materials Direct labour Variable overheads Fixed costs Production each year (units) Sales each year (units) Selling price for 2016 $50 Selling price for 2017 S60 20,000 and 16,000 17,000 and 16,000 2016 S 2017 $ 120,000 80,900 80,000 55,000 50,000 35,000 60,000 50,600 Required: A. Prepare a statement showing the gross profit for each of the three years if the company used: The marginal costing approach to valuing inventory: The absorption costing approach to valuing inventory. •
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Bennett's Manufacturing started business on 1 JUNE 2016, and incurred the
following costs during its first two years.
Year ending 31 March
Direct materials
Direct labour
Variable overheads
Fixed costs
Production each year (units)
Sales each year (units)
Selling price for 2016 $50
Selling price for 2017 S60
20,000 and 16,000
17,000 and 16,000
2016
S
2017
$
120,000
80,900
80,000 55,000
50,000 35,000
60,000 50,600
Required:
A. Prepare a statement showing the gross profit for each of the three years if the
company used:
The marginal costing approach to valuing inventory:
The absorption costing approach to valuing inventory.
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