should include

fixed selling and administration cost

variable selling and administrative

goods available for sale and closing inventory

QUESTION $1$

A company manufactures and sels a single product. Budgated data per unit of the product is:

'All variable costs are manufacturing Lie there are no non$-$manufacturing variable costs.

The above fixed production overhead absorption rate is based on budgeted production of $12,000$ units per period.

Budgeted non$-$production overhead $($all fixed$)$ is R$16,$ B$00$ per period.

Actual sales and production for two periods has been:

There was no stock at the start of Period $1.$ The selling price, unit variable costs and total fixed costs were as per

budget in both periods.

REQUIRED

$1\mathrm{.}1$ Prepare stalements of Comprehensive income for both periods $($ie period $18$ Period $2),$ using absorption costing.

showing the actual results for each of the two periods.

The company wishes to compare the results reported in $(1\mathrm{.}1)$ above with those that would be reported using

marginal costing.

Prepare the statement of comprehensive income for periods $($ie period $18$ Period $2),$ using marpinal costing.

showing the actual results for each of the two periods.

$1\mathrm{.}2$ Explain fully why the profits reported in period $1$ differ when profit is calculated using absorption costing and

marginal costing. Calculations are required to support your explanation.

Question $2$

$(10$ Marks$)$

Use the following information to calculate the value of inventory on hand on April $30$ and issue price to

production during April using FIFO inventory systam.