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LightsON (Pty) Ltd makes LED Lightbulbs. The entity has a dual accounting reporting system, whereby it uses variable costing...

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LightsON (Pty) Ltd makes LED Lightbulbs. The entity has a dual accounting reporting system, whereby it uses variable costing for internal management reporting purposes and absorption costing (based on a fully integrated system) for external reporting requirements. In the latter case, overheads are absorbed on the basis of budgeted production for each of the respective quarterly periods. The financial yearend is 31 December 2023. Budget data: At the beginning of the current financial year (2023), the management accountant, Mr. Smart, prepared a forecast budget for quarters 1 and 2 based on the following: 2nd Quarter 1st Quarter R200 R220 210 000 240 000 210 000 240 000 R75 R75 R5 R5 R6 750 000 R7 250 000 Note A R10 000 000 Note A R20 Selling price per unit Sales (units) Production (units) Prime cost per unit Variable selling and administration cost per unit Fixed selling and administration overhead Fixed production overhead Variable production overhead per unit Note A Mr. Smart derived the budgeted semi-variable overheads according to the following cost-volume relationship: Units produced Production overheads* 1st Quarter 150 000 R12 000 000 2nd Quarter 210 000 R13 200 000 * Production overheads are incurred on the basis of units produced.

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To analyze the financial performance of LightsON Pty Ltd we need to calculate the costs and profits for each quarter using both variable costing and a View the full answer


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Related Book For  answer-question
Fundamental financial accounting concepts

Fundamental financial accounting concepts

ISBN: 978-0078025365

8th edition

Authors: Thomas P. Edmonds, Frances M. Mcnair, Philip R. Olds, Edward

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Posted Date: May 23, 2023 01:25:59
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