Using the information below, prepare profit statements for June and July using: (a) marginal costing, (b) absorption costing.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Using the information below, prepare profit statements for June and July using:
(a) marginal costing,
(b) absorption costing.
A company produces and sells one product only which sells for $50 per unit. There were no
stocks at the end of May and other information is as follows.
Standard cost per unit
Direct material
Direct wages
Variable production overhead
Budgeted and actual costs per month
Fixed production overhead
Fixed selling expenses
Fixed administration expenses
Variable selling expenses 10% of sales value
Normal capacity is 11,000 units per month.
The number of units produced and sold was:
Sales
Production
99,000
C
18
3
14,000
26,000
June
Units
12,800 11,000
14,000 10,200
July
units
Transcribed Image Text:Using the information below, prepare profit statements for June and July using: (a) marginal costing, (b) absorption costing. A company produces and sells one product only which sells for $50 per unit. There were no stocks at the end of May and other information is as follows. Standard cost per unit Direct material Direct wages Variable production overhead Budgeted and actual costs per month Fixed production overhead Fixed selling expenses Fixed administration expenses Variable selling expenses 10% of sales value Normal capacity is 11,000 units per month. The number of units produced and sold was: Sales Production 99,000 C 18 3 14,000 26,000 June Units 12,800 11,000 14,000 10,200 July units
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