At the end of March 2021, there were 700 units of a product manufactured by D & Y Manufacturing. The company has a budgeted capacity of 9,000 units and during the month, one unit of the product was sold for $800. Production and sales for the month amounted to 4,800 units and 8,500 units respectively. Administrative, selling and production overheads were estimated at $200,000, $275,000 and $540,000 respectively. The following information relating to the product was also extracted from the financial records: Cost per unit Details $ Direct materials 300 Direct labour 200 Variable overheads 100 Total 600 Required: (c) Prepare profit statement for the month using Marginal Costing. (d) Prepare profit statement for the month using Absorption Costing.

At the end of March 2021, there were 700 units of a product manufactured by D & Y Manufacturing. The company has a budgeted capacity of 9,000 units and during the month, one unit of the product was sold for $800. Production and sales for the month amounted to 4,800 units and 8,500 units respectively. Administrative, selling and production overheads were estimated at $200,000, $275,000 and $540,000 respectively. The following information relating to the product was also extracted from the financial records: Cost per unit Details $ Direct materials 300 Direct labour 200 Variable overheads 100 Total 600 Required: (c) Prepare profit statement for the month using Marginal Costing. (d) Prepare profit statement for the month using Absorption Costing.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter4: Job Order Costing

Section: Chapter Questions

Problem 7EB: A company estimates its manufacturing overhead will be $840,000 for the next year. What is the...

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