Hendry Limited produces a mini-kitchen called Town Cook, which is enjoying extensive popularity amongst young children.The following data is available for the month:Calculate the unit product cost for the month under absorption costing. And Prepare an income statement for the month using the absorption costing method. Selling price (per unit)R116Units in opening inventory600Units manufactured2 550Units sold3 050Units in closing inventory100Variable costs per unt:Direct materialsR12,00Direct labourR50,00Variable manufacturing overheadR6,50Variable selling and administrativeR10,00Fixed costs:Fixed manufacturing overheadR81 000Fixed selling and administrativeR19 000The company produces the same number of units every month, although the sales in units vary from month to month. Thecompany's variable costs per unit and total fixed costs have been constant from month to month.(where applicable, round off amounts to two decimal places)

The income statement is prepared using various methods as variable costing and absorption costing…

Selling price (per unit) R116 Units in opening inventory 600 Jnits manufactured 2 550 Units sold 3 050 Units in closing inventory 100 /ariable costs per unit: Direct materials R12,00 Direct labour R50,00 Variable manufacturing overhead R6,50 Variable selling and administrative R10,00 Fixed costs: Fixed manufacturing overhead R81 000 Fixed selling and administrative R19 000 company produces the same number of units every month, although the sales in units vary from month to month. The pany's variable costs per unit and total fixed costs have been constant from month to month.

Selling price (per unit) R116 Units in opening inventory 600 Jnits manufactured 2 550 Units sold 3 050 Units in closing inventory 100 /ariable costs per unit: Direct materials R12,00 Direct labour R50,00 Variable manufacturing overhead R6,50 Variable selling and administrative R10,00 Fixed costs: Fixed manufacturing overhead R81 000 Fixed selling and administrative R19 000 company produces the same number of units every month, although the sales in units vary from month to month. The pany's variable costs per unit and total fixed costs have been constant from month to month.

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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