/ 4Practice Question(The following question is to be used for self study session)ProductionSales75%Just Toys Ltd. is a firm that produces stuff toys at the Montego Bay Free Zone. Details of theexpected number of stuff toys to be produced and sold for the last two quarters of thecalendar year 2003 are budgeted as follows:Selling price per toyCost per toy: Material+Required:a)b)Direct labourVariable production overheadFixed production overheadQuarter Ending Quarter EndingSeptemberDecember30,200331,200313,00015,00012,00016,000$70$14.00Normal output is 56,000 units per annum and this amount is used for the calculation offixed production overhead. Fixed production overhead accounts for the only productionoverhead variance. Fixed overhead expenditure and the production of stuff toys are spreadevenly throughout the year. There were no stuff toys in inventory at July 1, 2003.Marketing and administrative costs are:VariableFixed9.003.0010.0015% of sales revenue$480,000 per annumPrepare income statements for the quarters ended September 30,2003 andDecember 31,2003 on the basis of marginal costingExplain why the profit calculated under marginal costing would be different fromthe profit calculated as per total costing.

An income statement is a financial report that indicates the revenue and expenses of a business. It…

Production Sales Selling price per toy Cost per toy: Material Direct labour Variable production overhead Fixed production overhead Quarter Ending Quarter Ending September 30,2003 13,000 12,000 $70 $14.00 9.00 3.00 10.00 December 31,2003 15,000 16,000

Production Sales Selling price per toy Cost per toy: Material Direct labour Variable production overhead Fixed production overhead Quarter Ending Quarter Ending September 30,2003 13,000 12,000 $70 $14.00 9.00 3.00 10.00 December 31,2003 15,000 16,000

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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