Muneeba & Nuzaif (MN) manufactures and sells a single product. The following were incurred during the company's first year of operations: |Variable Cost per Unit: Rs. Production: Direct Material 30 Direct Labor 6 Variable Manufacturing Overhead 4 Variable Selling and Administrative 10 Fixed Cost per period: Fixed Manufacturing Overhead 320,000 Fixed Selling and Administrative 220,000 During 1 year, the company produced 40,000 units and sold 32,000 units. During 2nd year, the company produced 35,000 units and sold 40,000 units. The selling price if the company's product is Rs. 100 per unit. Required: 1. Assume the company uses the Absorption costing method. a. Compute the unit product cost for both years. b. Prepare an income statement for both years. 2. Assume the company uses the Variable costing method. a. Compute the unit product cost for both years. b. Prepare an income statement for both years. 3. Reconcile the profits for both years.

Muneeba & Nuzaif (MN) manufactures and sells a single product. The following were incurred during the company's first year of operations: |Variable Cost per Unit: Rs. Production: Direct Material 30 Direct Labor 6 Variable Manufacturing Overhead 4 Variable Selling and Administrative 10 Fixed Cost per period: Fixed Manufacturing Overhead 320,000 Fixed Selling and Administrative 220,000 During 1 year, the company produced 40,000 units and sold 32,000 units. During 2nd year, the company produced 35,000 units and sold 40,000 units. The selling price if the company's product is Rs. 100 per unit. Required: 1. Assume the company uses the Absorption costing method. a. Compute the unit product cost for both years. b. Prepare an income statement for both years. 2. Assume the company uses the Variable costing method. a. Compute the unit product cost for both years. b. Prepare an income statement for both years. 3. Reconcile the profits for both years.

Name: Muneeba & Nuzaif (MN) manufactures and sells a single product. The fo
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Description: Muneeba & Nuzaif (MN) manufactures and sells a single product. The following wereincurred during the company's first year of operations:|Variable Cost per Unit:Rs.Production:Direct Material30Direct Labor6Variable Manufacturing Overhead 4Variable Sel

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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