Question 1 Marshall Pty Ltd started business at the beginning of the 2014 financial year, and use predetermined overhead rates based on normal capacity to apply overhead. Management would like a comparison with direct costing so as to be able to evaluate its variable costs more easily. The company annual record shows: Units Normal Capacity 95,000 Production 100,000 Sales 85,000 Budgeted Costs Fixed factory overhead 180,500 Variable factory overhead 342,000 Actual Costs Actual selling price per unit 15.00 Actual variable costs per unit - Direct material - Direct labour - Factory Overhead 4.00 - Selling and Administration Expenses 0.40 Actual fixed costs in total - Factory overhead 180,500 - Selling and Administrative expenses 80,000 2.50 0.90 Required: (a) Unit cost to value closing inventory under both Direct and Absorption Costing (b) Income Statement for year ended 30 June 2014 using Absorption Costing. (c) Income Statement for year ended 30 June 2014 using Direct Costing. (d) Reconcile the Net Profits derived under both methods. Q2. Aast teok 1 page Qg/110 Duider No. 03188 Author: WAIFS