Help me with the questions provided Dan Wood Ltd commenced business on 1s January 2020 making one product only,which sells for K160 per item. The production and sales data for each of the first threemonths of 2020 was as follows:JanuaryFebruaryMarchSales in units2,4002,5003,800Production in units2,7002,4004,000Actual information for each month was as follows:Direct materials3 kilograms at K5 per kilogramDirect labour4 hours at K10 per hourVariable production overheadsSales commission150% of direct labour10% of sales valueFixed production overheadsFixed selling overheadsK10,000K35,000There was no opening inventory at the start of January. Fixed productionoverheads are budgeted at K120,000 per annum and are absorbed into productsbased on a budgeted normal output of 30,000 units per annumRequired:(a) Prepare a profit statement for each of the three months using absorptioncosting principles(b) Prepare a profit statement for each of the three months using marginalcosting principles.

1. Direct Material Cost per unit = 3kg x K5 = k15 2. Direct Labor Cost per unit =4 hours x K10 =…

Dan Wood Ltd commenced business on 1t January 2020 making one product only, which sells for K160 per item. The production and sales data for each of the first three months of 2020 was as follows: |January February March Sales in units 2,400 2,500 3,800 Production in units 2,700 2,400 4,000 Actual information for each month was as follows: Direct materials 3 kilograms at K5 per kilogram Direct labour 4 hours at K10 per hour Variable production overheads 150% of direct labour 10% of sales value Sales commission Fixed production overheads Fixed selling overheads K10,000 K35,000 There was no opening inventory at the start of January. Fixed production overheads are budgeted at K120,000 per annum and are absorbed into products based on a budgeted normal output of 30,000 units per annum Required: (a) Prepare a profit statement for each of the three months using absorption costing principles (b) Prepare a profit statement for each of the three months using marginal costing principles.

Dan Wood Ltd commenced business on 1t January 2020 making one product only, which sells for K160 per item. The production and sales data for each of the first three months of 2020 was as follows: |January February March Sales in units 2,400 2,500 3,800 Production in units 2,700 2,400 4,000 Actual information for each month was as follows: Direct materials 3 kilograms at K5 per kilogram Direct labour 4 hours at K10 per hour Variable production overheads 150% of direct labour 10% of sales value Sales commission Fixed production overheads Fixed selling overheads K10,000 K35,000 There was no opening inventory at the start of January. Fixed production overheads are budgeted at K120,000 per annum and are absorbed into products based on a budgeted normal output of 30,000 units per annum Required: (a) Prepare a profit statement for each of the three months using absorption costing principles (b) Prepare a profit statement for each of the three months using marginal costing principles.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Dan Wood Ltd commenced business on 1st January 2020 making one product only, which sells for K160 per item. The production and sales data for each of the first three months of 2020 was as follows:JanuaryFebruaryMarch Sales in units2,4002,5003,800 Production in units2,7002,4004,000 Actual information for each month was as follows:Direct materials 3 kilograms at K5 per kilogramDirect labour 4 hours at K10 per hourVariable production overheads 150% of direct labourSales commission 10% of sales valueFixed production overheads K10,000Fixed selling overheads K35,000 There was no opening inventory at the start of January. Fixed production overheads are budgeted at K120,000 per annum and are absorbed into products based on a budgeted normal output of 30,000 units per annum Required:Prepare a profit statement for each of the three months using absorption costing principlesDan Wood Ltd commenced business on 1st January 2020 making one product only, which sells for K160 per item. The production…
Dan Wood Ltd commenced business on 1st January 2020 making one product only, which sells for K160 per item. The production and sales data for each of the first three months of 2020 was as follows: January February March Sales in units 2,400 2,500 3,800 Production in units 2,700 2,400 4,000 Actual information for each month was as follows: Direct materials 3 kilograms at K5 per kilogram Direct labour 4 hours at K10 per hour Variable production overheads 150% of direct labour Sales commission 10% of sales value Fixed production overheads K10,000 Fixed selling overheads K35,000 There was no opening inventory at the start of January. Fixed production overheads are budgeted at K120,000 per annum and are absorbed into products based on a budgeted normal output of 30,000 units per annum Required: Prepare a profit statement for each of the three months using marginal costing principles.
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