Prepare the Income Statement for the year ended 31 December 2021 using the absorption costing method.
Umdloti Ltd, which manufactures liquid hand soap, commenced operations on 01 November 2021. Standard production for a typical month is expected to be 160 000 bottles. During November 2021 the company manufactured 170 000 bottles of hand soap. On 30 November 2021 there were 46 000 bottles of hand soap in inventory. Manufacturing and commercial costs during November 2021 were as follows: Direct materials R212 500 Direct labour R680 000 Variable manufacturing
Question 1: Prepare the Income Statement for the year ended 31 December 2021 using the absorption costing method.
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