Jaime Ltd manufactures and sells a small electric product to order for the computer industry. The estimated selling price and variable costs per unit for next year are as follows: (£ per unit) Selling price 654.00 Variable costs: Direct materials 216.00 Direct labour 108.00 Production overhead 54.00 Selling & distribution overhead 27.00 Jaime Ltd expects to sell 108,000 units next year. Jaime Ltd expects the stock level at the start of the year to be NIL and the stock at the end of the year to be 18,000 units. Information on fixed costs is as follows: Fixed costs: £ Production overhead 1,452,000 Selling & distribution 360,000 Administration overhead 342,000 Question: (a) Using absorption costing: (i) Calculate the production cost per unit. (ii) Prepare an income statement for the year.
Jaime Ltd manufactures and sells a small electric product to order for the computer industry. The estimated selling price and variable costs per unit for next year are as follows: (£ per unit) Selling price 654.00 Variable costs: Direct materials 216.00 Direct labour 108.00 Production overhead 54.00 Selling & distribution overhead 27.00 Jaime Ltd expects to sell 108,000 units next year. Jaime Ltd expects the stock level at the start of the year to be NIL and the stock at the end of the year to be 18,000 units. Information on fixed costs is as follows: Fixed costs: £ Production overhead 1,452,000 Selling & distribution 360,000 Administration overhead 342,000 Question: (a) Using absorption costing: (i) Calculate the production cost per unit. (ii) Prepare an income statement for the year.
Jaime Ltd manufactures and sells a small electric product to order for the computer industry. The estimated selling price and variable costs per unit for next year are as follows: (£ per unit) Selling price 654.00 Variable costs: Direct materials 216.00 Direct labour 108.00 Production overhead 54.00 Selling & distribution overhead 27.00 Jaime Ltd expects to sell 108,000 units next year. Jaime Ltd expects the stock level at the start of the year to be NIL and the stock at the end of the year to be 18,000 units. Information on fixed costs is as follows: Fixed costs: £ Production overhead 1,452,000 Selling & distribution 360,000 Administration overhead 342,000 Question: (a) Using absorption costing: (i) Calculate the production cost per unit. (ii) Prepare an income statement for the year.
Jaime Ltd manufactures and sells a small electric product to order for the computer industry. The estimated selling price and variable costs per unit for next year are as follows:
(£ per unit)
Selling price
654.00
Variable costs:
Direct materials
216.00
Direct labour
108.00
Production overhead
54.00
Selling & distribution overhead
27.00
Jaime Ltd expects to sell 108,000 units next year. Jaime Ltd expects the stock level at the start of the year to be NIL and the stock at the end of the year to be 18,000 units. Information on fixed costs is as follows:
Fixed costs:
£
Production overhead
1,452,000
Selling & distribution
360,000
Administration overhead
342,000
Question:
(a) Using absorption costing:
(i) Calculate the production cost per unit.
(ii) Prepare an income statement for the year.
Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.
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