During December $2022,$ Johnsons Manufacturing Company budgeted to produce $5,000$ units of Product KKM$.$ Actual production for the month was $4,800$ units. At the beginning of the month the company had in store $500$ units of the product. During the month the company sold one unit of the product for $$1,200$ and there were $400$ units of the product at the end of December $2022.$ Fixed production, administrative and distribution expenses were $$1,000,000,$ $$550,000$ and $$450,000$ respectively. The following additional information was made available from the companys records:

Cost per unit

Details $

Direct materials $200$

Direct labour $150$

Direct expense $70$

Variable production overheads $100$

$520$

Fixed production overheads $($OAR$))200$

Total cost per unit $720$

Required:

$($a$)$ What was the contribution per unit of production for December $2021?$

$($b$)$ Determine the number of units of Product KKM sold by Johnsons Manufacturing Company during December $2022.$

$($c$)$ Prepare an income statement to show profit for December $2022$ using the marginal costing approach.

$($d$)$ Prepare an income statement to show profit for December $2022$ using absorption costing approach.

$($e$)$ Show a reconciliation of the profit figures obtained above.

Answer rating: 100% (QA)

a Contribution per unit of production for December 2021 Contribution per unit Selling price per unit ... View the full answer