e Manufacturing Sdn. Bhd. started its basiness on1 March 2019. In the coming year, e company...

Transcribed Image Text:

e Manufacturing Sdn. Bhd. started its basiness on1 March 2019. In the coming year, e company expects a normal production output cf 36,000 nits per annum for its prime product, Valia. The following is the standard cost card for a unit of Valia: RM 8.00 Costs Direct Material Direct Labor Variable production overbead Fixed production overhead 5.00 2.00 5.00 Each unit of Valia is expected to sell at RM35. Selling expenses are estimated at: Fixed Variable RM10,000 15% of total sales value The company expects to produce 2,000 units of Valia in the first month (March 2019) of its operation. Budgeted sales is forecasted at 1,500 umits đuring March 2019. Required: a) What would be Zinc Manufacturing Sdn. Bhd.'s finished good inventory cost on 31 March 2019 under: (1) absorption costing method variable costing method (ii) (4 marks) b) Prepare income statements for March 2018 using: absorption costing method (ii) variable costing method (7 marks) c) Reconcile the differences in net income under the two costing approaches. (3 marks) d) Comment on the differences in net income between both costing method used, (3 marks) e) Why is variable costing income statement useful for decision-making and performance evaluation? (3 marks) [TOTAL 20 MARKS] e Manufacturing Sdn. Bhd. started its basiness on1 March 2019. In the coming year, e company expects a normal production output cf 36,000 nits per annum for its prime product, Valia. The following is the standard cost card for a unit of Valia: RM 8.00 Costs Direct Material Direct Labor Variable production overbead Fixed production overhead 5.00 2.00 5.00 Each unit of Valia is expected to sell at RM35. Selling expenses are estimated at: Fixed Variable RM10,000 15% of total sales value The company expects to produce 2,000 units of Valia in the first month (March 2019) of its operation. Budgeted sales is forecasted at 1,500 umits đuring March 2019. Required: a) What would be Zinc Manufacturing Sdn. Bhd.'s finished good inventory cost on 31 March 2019 under: (1) absorption costing method variable costing method (ii) (4 marks) b) Prepare income statements for March 2018 using: absorption costing method (ii) variable costing method (7 marks) c) Reconcile the differences in net income under the two costing approaches. (3 marks) d) Comment on the differences in net income between both costing method used, (3 marks) e) Why is variable costing income statement useful for decision-making and performance evaluation? (3 marks) [TOTAL 20 MARKS]

Answer rating: 100% (QA)

Working notes a Absorption costing method i Ending inventory units Product cost per unit Finished go... View the full answer