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QUESTION 2 Mulenga Chisha (MC) produces crocodile sausages and the budgeted profit per unit is as follows: K Materials 1.00 Labour 1.50 Variable Production overhead 1.50 Fixed Production overhead 2.00 Variable Selling Cost 0.50 Fixed Selling Cost 1.00 Profit Selling price 2.50 10.00 MC has budgeted 9,500 units of crocodile sausage in a year. In the first year of production, the only difference from the budget was that MC produced 10,500 units of crocodile sausages and sold 8,500 units. Required: Prepare a) Profit statement under absorption costing. b) Profit statement under marginal costing.

QUESTION 2 Mulenga Chisha (MC) produces crocodile sausages and the budgeted profit per unit is as follows: K Materials 1.00 Labour 1.50 Variable Production overhead 1.50 Fixed Production overhead 2.00 Variable Selling Cost 0.50 Fixed Selling Cost 1.00 Profit Selling price 2.50 10.00 MC has budgeted 9,500 units of crocodile sausage in a year. In the first year of production, the only difference from the budget was that MC produced 10,500 units of crocodile sausages and sold 8,500 units. Required: Prepare a) Profit statement under absorption costing. b) Profit statement under marginal costing.

FINANCIAL ACCOUNTING
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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QUESTION 2 Mulenga Chisha (MC) produces crocodile sausages and the budgeted profit per unit is as follows: K Materials 1.00 Labour 1.50 Variable Production overhead 1.50 Fixed Production overhead 2.00 Variable Selling Cost 0.50 Fixed Selling Cost 1.00 Profit Selling price 2.50 10.00 MC has budgeted 9,500 units of crocodile sausage in a year. In the first year of production, the only difference from the budget was that MC produced 10,500 units of crocodile sausages and sold 8,500 units. Required: Prepare a) Profit statement under absorption costing. b) Profit statement under marginal costing.
Transcribed Image Text:QUESTION 2 Mulenga Chisha (MC) produces crocodile sausages and the budgeted profit per unit is as follows: K Materials 1.00 Labour 1.50 Variable Production overhead 1.50 Fixed Production overhead 2.00 Variable Selling Cost 0.50 Fixed Selling Cost 1.00 Profit Selling price 2.50 10.00 MC has budgeted 9,500 units of crocodile sausage in a year. In the first year of production, the only difference from the budget was that MC produced 10,500 units of crocodile sausages and sold 8,500 units. Required: Prepare a) Profit statement under absorption costing. b) Profit statement under marginal costing.
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