UPSA Lid commenced business on 1 July 2020 as a manufacturer of bolt and nut at...

 

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UPSA Lid commenced business on 1" July 2020 as a manufacturer of bolt and nut at the Heavy Industrial Area for the use of mechanies. The standard cost of a bolt and nut is as follows: GH¢ Direct material 8 Direct labour Variable production overhead 2 Fixed production overhead 20 The fixed production overhead figure has been calculated on the basis of a budgeted normal output of 36,000 units per year. You are to assume that all the budgeted fixed expenses are incurred evenly over the year. July and August are to be taken as equal period months. Selling, distribution and administrative expenses are as follows: Fixed GH¢1,200 per month Variable 15% of sales value The selling price per unit is GH¢40 and the number of units produced and sold for the month of July and August, 2020 is as shown below: 10 / 18 July August Production 2,000 3,200 Sales 1,500 3,000 Required: (a) Prepare profit statement for the months of July and August, 2020 using i. Marginal costing ii. Absorption costing (b) Prepare a statement reconciling the profit or loss figures in your answer a(i) and a(ii). UPSA Lid commenced business on 1" July 2020 as a manufacturer of bolt and nut at the Heavy Industrial Area for the use of mechanies. The standard cost of a bolt and nut is as follows: GH¢ Direct material 8 Direct labour Variable production overhead 2 Fixed production overhead 20 The fixed production overhead figure has been calculated on the basis of a budgeted normal output of 36,000 units per year. You are to assume that all the budgeted fixed expenses are incurred evenly over the year. July and August are to be taken as equal period months. Selling, distribution and administrative expenses are as follows: Fixed GH¢1,200 per month Variable 15% of sales value The selling price per unit is GH¢40 and the number of units produced and sold for the month of July and August, 2020 is as shown below: 10 / 18 July August Production 2,000 3,200 Sales 1,500 3,000 Required: (a) Prepare profit statement for the months of July and August, 2020 using i. Marginal costing ii. Absorption costing (b) Prepare a statement reconciling the profit or loss figures in your answer a(i) and a(ii).

Answer rating: 100% (QA)

July August Unit sales 1500 3000 Manufacturing cost per unit July August July Selling price Sales va... View the full answer