Thotho manufactures headscarves.

The following information is available in her books on December 31, 2012.

	BWP
Opening inventory	1,500
Headscarves made during the year	9,000
Headscarves sold during the year	9,500
Closing inventory	1,000
Selling price	90
Manufacturing costs: Variable costs: - Direct material/headscarf - Direct labour hour cost used to make one scarf - Variable manufacturing overhead Fixed manufacturing overheads per year	25 9 5 150,000
Selling and administrative costs: Commission paid for selling one scarf Fixed selling and administration costs per year	10 100,000

Required: a)

Prepare the income statement for the year ended December 31, 2012 using

i) Variable costing.

ii) Absorption cost 

Answer rating: 100% (QA)

Ans 1 Thotho Variable Costing Income Statement 855000 Sales 9500 90 Less Variable cost of goods sol... View the full answer