Shaheen Ltd. manufactures around 10,000 machines in a month. The break-up of unit cost is as under:
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Question:
Shaheen Ltd. manufactures around 10,000 machines in a month. The break-up of unit cost is as under:
Rs.
Direct Material 750
Direct Labour 300
Variable Overhead 150
Fixed Overhead 600
1,800
Selling Price of machine is Rs.2,400. Production and sales for periods 1,2 and 3 were as under:
Period 1 Period 2 Period 3
Production 10,000 8,000 11,000
Sales 8,000 9,000 12,000
Production can be increase to 11,000 units without a corresponding increase in fixed overhead.
Required:
Prepare Operating statements for the three periods assuming the company uses:
- Absorption Costing; and
Marginal Costing also solve adjusted Cost of good sold and unadjusted under applied or over applied in absorption costing.
Expert Answer:
a Absorption Costing Product Cost Period 1 Period 2 Period 3 Direct Materials 7500000 6000000 825000... View the full answer
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