Case HOKKIE FACTS: A company HOKKIE produces hockey sticks. The direct material per stick amounts to...

 

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Case HOKKIE FACTS: A company HOKKIE produces hockey sticks. The direct material per stick amounts to 15,00 EUR. The direct labour per stick equals 20,00 EUR. The total variable indirect production costs of the period amount to 100 000,00 EUR and the total fixed indirect production costs amount to 80 000,00 EUR. The company produces at full capacity level 10 000 sticks, however only finished 9 000 sticks at the end of the period. The degree of completion of the work in progress amounts to 60 %. The company sells 90% of its completely finished sticks at a selling price of 80,00 EUR per stick. There is no beginning inventory of the work in progress. All materials are being added at the beginning of the production process. REQUIRED: a) Calculate the Operating profit according to Full costing. b) Calculate the Operating Profit according to Direct Costing. Case HOKKIE FACTS: A company HOKKIE produces hockey sticks. The direct material per stick amounts to 15,00 EUR. The direct labour per stick equals 20,00 EUR. The total variable indirect production costs of the period amount to 100 000,00 EUR and the total fixed indirect production costs amount to 80 000,00 EUR. The company produces at full capacity level 10 000 sticks, however only finished 9 000 sticks at the end of the period. The degree of completion of the work in progress amounts to 60 %. The company sells 90% of its completely finished sticks at a selling price of 80,00 EUR per stick. There is no beginning inventory of the work in progress. All materials are being added at the beginning of the production process. REQUIRED: a) Calculate the Operating profit according to Full costing. b) Calculate the Operating Profit according to Direct Costing.

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