Mathematics, 20.01.2021 14:00 alex7881
Allayers Company sells its special motorcycle screws that is manufactures at RM25 per unit. The company’s total fixed manufacturing overhead is RM44,000 which is based on a production of 22,000 units per annum. The information for the financial year 2019 is as follows:
Production unit 22,000
Sales unit 18,900 Beginning inventory 3,300
Direct material and
labour per unit RM14
Variable manufacturing
overheadperunit RM4
Variable selling and
administrative costs
per unit RM2
Fixed selling and
administrative expenses
per annum RM20,000
Based on the information above, the accountant of the company has prepared absorption income statement as follows:
Sales (at 18,900 units) RM472,500
Less: Cost of goods sold (RM378,000)
Gross margin RM94,500
Less: Selling and administrative costs (RM57,800)
Net operating profit RM36,700
Required:
a. Calculate unit product cost under variable costing method.
b. Redo income statement for the company by using variable costing method.
Answers: 3
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Allayers Company sells its special motorcycle screws that is manufactures at RM25 per unit. The comp...
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