The following information was extracted from the book of Happy ltd for year ended 31/12/2011

Output 100,000 units

Production costs

Direct labour cost $1 milion

Direct material cost $200,000
Variable overheads $200,000
Fixed overheads $85,000
Units sold 65,000
Selling price per units $200

Assume closing stocks at the end of the previous period were nil Required:

a) Using both absorption and marginal costing, determine cost per unit (8 marks)

b) Prepare the income statement (12 marks)

Answer rating: 100% (QA)

The detailed answer for the above question is provided below a Cost per unit under Absorption Costin... View the full answer