### Educational Website Content: Thotho's Headscarf Manufacturing Financial Data**Thotho Manufactures Headscarves**The following financial information is recorded for Thotho's headscarf business as of December 31, 2012.#### Inventory and Production Data| Description | Amount (BWP) ||----------------------------------|--------------|| Opening inventory | 1,500 || Headscarves made during the year | 9,000 || Headscarves sold during the year | 9,500 || Closing inventory | 1,000 || Selling price per headscarf | 90 |#### Manufacturing Costs**Variable Costs:**- **Direct Material per Headscarf:** BWP 25- **Direct Labor per Headscarf:** BWP 9- **Variable Manufacturing Overhead:** BWP 5- **Total Variable Cost:** BWP 150,000**Fixed Costs:**- Fixed manufacturing overheads per year: BWP 150,000#### Selling and Administrative Costs**Variable Costs:**- Commission paid for selling one scarf: BWP 10**Fixed Costs:**- Fixed selling and administrative costs per year: BWP 100,000### TaskPrepare the income statement for the year ended December 31, 2012, utilizing the Absorption Cost method. ---This information will aid in understanding Thotho's cost structure and profitability for the year 2012. Use these figures to calculate total revenues, production costs, and to determine the overall financial performance through an income statement.

Its a technique in which all manufacturing costs, variable and fixed are considered as costs of…

Thotho manufactures headscarves. The following information is available in her books on December 31, 2012. Opening inventory Headscarves made during the year Headscarves sold during the year Closing inventory Selling price Manufacturing costs: Variable costs: - Direct material/headscarf - Direct labour hour cost used to make one scarf - Variable manufacturing overhead Fixed manufacturing overheads per year Selling and administrative costs: Commission paid for selling one scarf Fixed selling and administration costs per year BWP 1,500 9,000 9,500 1,000 90 25 9 5 150,000 10 100,000 Prepare the income statement for the year ended December 31, 2012 using Absorption cost

Thotho manufactures headscarves. The following information is available in her books on December 31, 2012. Opening inventory Headscarves made during the year Headscarves sold during the year Closing inventory Selling price Manufacturing costs: Variable costs: - Direct material/headscarf - Direct labour hour cost used to make one scarf - Variable manufacturing overhead Fixed manufacturing overheads per year Selling and administrative costs: Commission paid for selling one scarf Fixed selling and administration costs per year BWP 1,500 9,000 9,500 1,000 90 25 9 5 150,000 10 100,000 Prepare the income statement for the year ended December 31, 2012 using Absorption cost

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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