A Khang Ltd manufactures digital photo albums. The following information is available for the year ending 31 December 2018.

Required:
(a) Prepare the statement of profit or loss for Khang Ltd for the year ending 31 December 2018 using:

(i) Absorption costing
(ii) Marginal costing
(b) Provide a reconciliation of the two profit (or loss) amounts in (a) above.
(c) Calculate the contribution earned at this level of output and sales.

Transcribed Image Text:

Opening inventory Production Sales Selling price per unit Direct labour cost per unit Direct material cost per unit Variable selling and administration per unit Fixed selling and administration costs Variable manufacturing overhead per unit Fixed manufacturing costs zero 60,000 units 45,000 units £18 £3 £5 £2 £25,000 £1 £240,000