Bradman Ltd manufactures cricket bats for cricket clubs in Australia. The company's product is sold by the box at $90 per bat. The management accountant of Bradman Ltd is not happy with the current costing system in place and asked you (the junior management accountant) to answer the following questions by using the given data: Sales (in units) Production (in units) Production Costs: Variable Manufacturing costs: Fixed Manufacturing overhead: Selling and Administrative costs: Variable: Repair and maintenance Fixed: ● 2021 4,500 5,400 37,800 75,600 45,000 2022 4,500 3,600 30,000 25,200 45,000 30,000 Bradman Ltd had no beginning or ending work-in-progress inventories for either year. The total cost of manufacturing includes the following: machinery, building, rental value, salary to top management staff, interest, taxes and insurance, raw material wages, fuel, transport, repair and maintenance, and other expenses like expenditure on packing, thread, grips, stickers, etc. Required: a) Prepare an Income Statement for both the years based on Absorption costing and Variable costing.
Bradman Ltd manufactures cricket bats for cricket clubs in Australia. The company's product is sold by the box at $90 per bat. The management accountant of Bradman Ltd is not happy with the current costing system in place and asked you (the junior management accountant) to answer the following questions by using the given data: Sales (in units) Production (in units) Production Costs: Variable Manufacturing costs: Fixed Manufacturing overhead: Selling and Administrative costs: Variable: Repair and maintenance Fixed: ● 2021 4,500 5,400 37,800 75,600 45,000 2022 4,500 3,600 30,000 25,200 45,000 30,000 Bradman Ltd had no beginning or ending work-in-progress inventories for either year. The total cost of manufacturing includes the following: machinery, building, rental value, salary to top management staff, interest, taxes and insurance, raw material wages, fuel, transport, repair and maintenance, and other expenses like expenditure on packing, thread, grips, stickers, etc. Required: a) Prepare an Income Statement for both the years based on Absorption costing and Variable costing.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Bradman Ltd manufactures cricket bats for cricket clubs in Australia. The company's product is sold by the box
at $90 per bat. The management accountant of Bradman Ltd is not happy with the current costing system in
place and asked you (the junior management accountant) to answer the following questions by using the given
data:
Sales (in units)
Production (in units)
Production Costs:
Variable Manufacturing costs:
Fixed Manufacturing overhead:
Selling and Administrative costs:
Variable:
Repair and maintenance
Fixed:
●
2021
4,500
5,400
37,800
75,600
45,000
30,000
2022
4,500
3,600
25,200
75,600
45,000
30,000
Bradman Ltd had no beginning or ending work-in-progress inventories for either year.
The total cost of manufacturing includes the following: machinery, building, rental value, salary to top
management staff, interest, taxes and insurance, raw material wages, fuel, transport, repair and
maintenance, and other expenses like expenditure on packing, thread, grips, stickers, etc.
Required:
a) Prepare an Income Statement for both the years based on Absorption costing and Variable costing.
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