a) Company A has the following information applicable to its products: Total Overheads 100,000 Total machine...

  

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a) Company A has the following information applicable to its products: Total Overheads 100,000 Total machine Hours 50,000 Product A B Units of Production 12,500 15,000 Direct Material Cost per unit 60 50 Direct Labour Cost per unit 30 22 10 hours 5 units Machine hours per unit The total overheads consist of 40,000 variable overheads. Unit variable cost is the same for both products. Required: Determine the cost of products A and B using variable costing and absorption costing methods. Assume that the company uses machine hours as the basis of absorption. 15 marks b) Rainy Days Ltd makes a product (Splash) which has a variable production cost of 6 per unit and a selling price of 14 per unit. At the beginning of September 2020, there were no opening inventories and production during the month was 18,000 units. Fixed costs for the month were 40,000 (production, administration, sales, and distribution). There were no variable marketing costs. Required: Calculate the contribution and profit for September 2020, using marginal costing principles, if sales were 10,000 Splashes. Present your answer in form of a profit statement. 10 marks a) Company A has the following information applicable to its products: Total Overheads 100,000 Total machine Hours 50,000 Product A B Units of Production 12,500 15,000 Direct Material Cost per unit 60 50 Direct Labour Cost per unit 30 22 10 hours 5 units Machine hours per unit The total overheads consist of 40,000 variable overheads. Unit variable cost is the same for both products. Required: Determine the cost of products A and B using variable costing and absorption costing methods. Assume that the company uses machine hours as the basis of absorption. 15 marks b) Rainy Days Ltd makes a product (Splash) which has a variable production cost of 6 per unit and a selling price of 14 per unit. At the beginning of September 2020, there were no opening inventories and production during the month was 18,000 units. Fixed costs for the month were 40,000 (production, administration, sales, and distribution). There were no variable marketing costs. Required: Calculate the contribution and profit for September 2020, using marginal costing principles, if sales were 10,000 Splashes. Present your answer in form of a profit statement. 10 marks

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Answer a Costing Products A and B Variable Costing Variable Overhead Rate per Machine Hour 40000 Var... View the full answer