Flexible budget for a product as prepare by Anchor Ltd, is given below:   Sales – unit                                             10,000            15,000             20,000                                                                     Rs.                   Rs.                   Rs. Sales                                                       800,000           1,200,000        1,600,000 Manufacturing cost:             Variable                                       300,000           450,000           600,000             Fixed                                           200,000           200,000           200,000 Total manufacturing cost                       500,000           650,000           800,000 Marketing and other expenses:             Variable                                      200,000           300,000           400,000             Fixed                                           160,000           160,000           160,000 Total Marketing and other expense       360,000           460,000           560,000 Operating income / (loss)                      (60,000)             90,000           240,000   Additional information: The budget of 20,000 units will be used for allocating the fixed manufacturing cost to units of product. At the end of first six months, 12,000 units have been completed and 6,000 units have been sold @ Rs.80 per unit. All fixed costs are budgeted and incurred uniformly throughout the year and all costs incurred, coincide with budget. The over or under applied fixed manufacturing cost is deferred unit the end of the year.   (Note:  Don’t write Comma (,) Full stop (.) and any Rs. Signs in Answer just write in number (i.e. 10000, but not Rs.10,000))   REQUIRED: Calculate the Unadjusted Cost of Goods Sold in Absorption Costing?

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter7: Budgeting
Section: Chapter Questions
Problem 15EA: Cold X, Inc. uses this information when preparing their flexible budget: direct materials of $2 per...
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q8:

Flexible budget for a product as prepare by Anchor Ltd, is given below:

 

Sales – unit                                             10,000            15,000             20,000

                                                                    Rs.                   Rs.                   Rs.

Sales                                                       800,000           1,200,000        1,600,000

Manufacturing cost:

            Variable                                       300,000           450,000           600,000

            Fixed                                           200,000           200,000           200,000

Total manufacturing cost                       500,000           650,000           800,000

Marketing and other expenses:

            Variable                                      200,000           300,000           400,000

            Fixed                                           160,000           160,000           160,000

Total Marketing and other expense       360,000           460,000           560,000

Operating income / (loss)                      (60,000)             90,000           240,000

 

Additional information:

  • The budget of 20,000 units will be used for allocating the fixed manufacturing cost to units of product.
  • At the end of first six months, 12,000 units have been completed and 6,000 units have been sold @ Rs.80 per unit.
  • All fixed costs are budgeted and incurred uniformly throughout the year and all costs incurred, coincide with budget.
  • The over or under applied fixed manufacturing cost is deferred unit the end of the year.

 

(Note:  Don’t write Comma (,) Full stop (.) and any Rs. Signs in Answer just write in number (i.e. 10000, but not Rs.10,000))

 

REQUIRED:

Calculate the Unadjusted Cost of Goods Sold in Absorption Costing?

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