The following data is relating to two factories which they only produce and sell a single product: Factory 1Factory 2Selling price per unit RM 10RM 12Variable cost per unit RM 4RM 8Annual fixed costRM 20,000RM 120,000 Production level (units)5,000 units60,000 unitsSales (units)4,200 units57,500 units Required:Prepare for each factory the statement to show how profit is calculated by using Marginal Costing method.

Under marginal costing method, the Contibution is calculated on the basis of marginal revenue and…

Answered: The following data is relating to two…

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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The following data is relating to two factories which they only produce and sell a single product:

	Factory 1	Factory 2
Selling price per unit	RM 10	RM 12
Variable cost per unit	RM 4	RM 8
Annual fixed cost	RM 20,000	RM 120,000

Production level (units)	5,000 units	60,000 units
Sales (units)	4,200 units	57,500 units

Required:

Prepare for each factory the statement to show how profit is calculated by using Marginal Costing method.

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