QUESTION $1[20$ MARKS$]$

The following information relates $to$ the only product made $by$ Bakada $CC$ during July $2023.$

Opening inventory

$0$

Number $of$ units manufactured

$9100$

Number $of$ units sold $(atR520$ per unit$)$

$7100$

Direct material cost per unit

$90$

Direct Labour cost per unit

$180$

Variable manufacturing overhead per unit

$90$

Variable selling cost per unit

$20$

Fixed manufacturing overhead cost

$460000$

Fixed selling and administrative cost

$175000$

Required

Draft the income statement for Bakada $CC$ for July $2023$ using:

$1\mathrm{.}1$

The marginal costing method $(7)$

$1\mathrm{.}2$

The $absorption$ costing method $(7)$

$1\mathrm{.}3$

Reconcile the profit calculated according $toabsorption$ with the profit calculated according $to$ marginal costing method $(using3$ methods$).(6)$

Question $2(10$ Marks$)$

Use the following information $to$ calculate the value $of$ inventory $on$ hand $on$ April $30$ and cost $of$ sales using AVCO method.

$01-$April

Beginning Inventory

$50$ units @ $R15$ per unit

$5$

Purchase

$135$ units @ $20$ per unit

$9$

Issue $to$ production

$92$ Units

$11$

Purchase

$30$ units @ $R16$ per unit

$16$

Purchase

$78$ units @ $R17$per unit

$20$

Issue $to$ production

$120$ Units

$30$

Issue $to$ production

$60$ Units