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Thotho manufactures headscarves. The following information is available in her books on December 31, 2012.     BW Opening inventory 1500 Headscarves made during the year 9000 Head scarves sold during the year 9500 Closing inventory 1000 Selling price 90 Manufacturing costs   Variable costs   Direct material/Headscarf 25 Direct labour hour cost used to 9         make one scarf 5 variable manufacturing overhead 15000 Fixed manufacturing overhead per year   Selling and administrative costs:   Commission paid for selling one scarf 10 fixed selling and administration costs per year 100000

Thotho manufactures headscarves. The following information is available in her books on December 31, 2012.     BW Opening inventory 1500 Headscarves made during the year 9000 Head scarves sold during the year 9500 Closing inventory 1000 Selling price 90 Manufacturing costs   Variable costs   Direct material/Headscarf 25 Direct labour hour cost used to 9         make one scarf 5 variable manufacturing overhead 15000 Fixed manufacturing overhead per year   Selling and administrative costs:   Commission paid for selling one scarf 10 fixed selling and administration costs per year 100000

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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Thotho manufactures headscarves. The following information is available in her books on
December 31, 2012.

 

  BW
Opening inventory 1500
Headscarves made during the year 9000
Head scarves sold during the year 9500
Closing inventory 1000
Selling price 90
Manufacturing costs  
Variable costs  
  • Direct material/Headscarf
 25
  • Direct labour hour cost used to
 9
        make one scarf 5
  • variable manufacturing overhead
 15000
Fixed manufacturing overhead per year  
Selling and administrative costs:  
Commission paid for selling one scarf 10
fixed selling and administration costs per year 100000

Required:
a) Prepare the income statement for the year ended December 31, 2012 using
i) Variable costing.

 

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