REQUIREDPrepare the Income Statement of Abbey Limited for the month ended 31 March 2023 using the followingmethods:2.1 Absorption costing2.2 Variable costingINFORMATIONThe following information was extracted from the accounting records of Abbey Limited for the month ended 31March 2023:Inventory on 01 March 2023ProductionSalesSelling price per unitManufacturing costs:Fixed manufacturing overheads costsDirect materials cost per unitDirect labour cost per unitVariable manufacturing overheads costs per unitMarketing costs:AdvertisingSales personnel's salaries and commissionDelivery costsAdministration costs:SalariesOther office costsNil50 000 units40 000 unitsR200R480 000R40R24R16R32 000 per monthR36 000 per month plus 5% of salesR24 per unit soldR80 000 per monthR32 000 per month plus R16 per unit sold

Name: REQUIREDPrepare the Income Statement of Abbey Limited for the month e
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Description: REQUIREDPrepare the Income Statement of Abbey Limited for the month ended 31 March 2023 using the followingmethods:2.1 Absorption costing2.2 Variable costingINFORMATIONThe following information was extracted from the accounting records of Abbey Limi

Answer:- Income statement:- An entity's revenue and expenses are listed on its income statement,…

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Accounting

Prepare the Income Statement of Abbey Limited for the month ended 31 March 2023 using the following methods: 2.1 Absorption costing 2.2 Variable costing INFORMATION The following information was extracted from the accounting records of Abbey Limited for the month ended 31 March 2023: Inventory on 01 March 2023 Production Sales Selling price per unit Nil 50 000 units 40 000 units R200

Prepare the Income Statement of Abbey Limited for the month ended 31 March 2023 using the following methods: 2.1 Absorption costing 2.2 Variable costing INFORMATION The following information was extracted from the accounting records of Abbey Limited for the month ended 31 March 2023: Inventory on 01 March 2023 Production Sales Selling price per unit Nil 50 000 units 40 000 units R200

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Concept explainers

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.

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Question

REQUIRED
Prepare the Income Statement of Abbey Limited for the month ended 31 March 2023 using the following
methods:
2.1 Absorption costing
2.2 Variable costing
INFORMATION
The following information was extracted from the accounting records of Abbey Limited for the month ended 31
March 2023:
Inventory on 01 March 2023
Production
Sales
Selling price per unit
Manufacturing costs:
Fixed manufacturing overheads costs
Direct materials cost per unit
Direct labour cost per unit
Variable manufacturing overheads costs per unit
Marketing costs:
Advertising
Sales personnel's salaries and commission
Delivery costs
Administration costs:
Salaries
Other office costs
Nil
50 000 units
40 000 units
R200
R480 000
R40
R24
R16
R32 000 per month
R36 000 per month plus 5% of sales
R24 per unit sold
R80 000 per month
R32 000 per month plus R16 per unit sold

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