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 $($at R$520$ 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 to absorption with the profit calculated according to marginal costing method $($using $3$ 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 @ R$15$ per unit

$5$

Purchase

$135$ units @ $20$ per unit

$9$

Issue to production

$92$ Units

$11$

Purchase

$30$ units @ R$16$ per unit

$16$

Purchase

$78$ units @ R$17$per unit

$20$

Issue to production

$120$ Units

$30$

Issue to production

$60$ Units