Merry Company produces clothes. One of the company's products is KIKILULU Skirts which are sold for RM90 each. • The standard cost of producing 100 units of KIKILULU skirt is shown below: RM Direct labour 500 Direct material 2,000 Variable production overhead 1,200 Fixed production overhead 1,800 TOTAL 5,500 • Production and inventory data during the month of October 2021 is given below: Units Unit production 5000 Opening inventory 10,000 Closing inventory 8,000 • The company's normal production is 120,000 units per annum. • Fixed production overhead cost spread evenly over the year. • The fixed selling and distribution cost per year is RM78,000. Variable selling and distribution cost is RM5.00 per unit.
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- Synergy Manufacturing Co. Ltd. manufactures Product A and Product B. The following information is available for March 2020 Product A Product B Production (units) 5,000 3,500 Sales (units) 4,600 3,200 Opening inventory (units) Financial data: Product A Product B Unit selling price £ 180.00 £ 150.00 Unit cost: direct materials £ 30.00 £ 24.00 direct labour £ 36.00 £ 24.00 variable production overheads £ 24.00 £ 16.00 fixed production overheads £ 60.00 £ 40.00 variable selling overheads £ 2.00 £ 2.00 Fixed production overheads for the period were £210,000 and fixed administration overheads were £54,000. Please note that fixed production overheads and fixed administration overheads are shared based on the number of production units for Product A and Product B. Required: Based on the details provided in the table below, prepare and interpret accurate income statements for the company using a range of management accounting techniques, such as marginal and absorption costs.Jane Company produces clothes. One of the company's products is Diana Skirts which are sold for $90 each. The standard cost of producing 100 units of Diana skirt is shown below: Direct labour 500 Direct material 2,000 Variable production overhead 1,200 Fixed production overhead 1,800 ТОTAL 5,500 • Production and inventory data during the month of October 2021 is given below: Units Unit production 5000 Opening inventory 10,000 Closing inventory 8,000 • The company's normal production is 120,000 units per annum. • Fixed production overhead cost spread evenly over the year. • The fixed selling and distribution cost per year is $78,000. Variable selling and distribution cost is $5.00 per unit. Required: Prepare Operating Income Statement for the month of October 2021 using Absorption Costing Approach.Jane Company produces clothes. One of the company's products is Diana Skirts which are sold for $90 each. The standard cost of producing 100 units of Diana skirt is shown below: Direct Jabour 500 Direct material 2,000 Variable production overhead 1,200 Fixed production overhead 1,800 ТОTAL 5,500 • Production and inventory data during the month of October 2021 is given below: Units Unit production Opening inventory Closing inventory 5000 10,000 8,000 The company's normal production is 120,000 units per annum. • Fixed production overhead cost spread evenly over the year. • The fixed selling and distribution cost per year is $78,000. Variable selling and distribution cost is $5.00 per unit. Required: Prepare Operating Income Statement for the month of October 2021 using Marginal Costing Approach.
- Umdloti Ltd, which manufactures liquid hand soap, commenced operations on 01 November 2021. Standard production for a typical month is expected to be 160 000 bottles. During November 2021 the company manufactured 170 000 bottles of hand soap. On 30 November 2021 there were 46 000 bottles of hand soap in inventory. Manufacturing and commercial costs during November 2021 were as follows: Direct materialsDirect labourVariable manufacturing overheads Variable marketing costsFixed administration costsFixed manufacturing overheadsR212 500 R680 000 R37 400 R135 160 R84 320 R113 900 The hand soap was sold at R12 per bottle during November 2021. During December 2021, Umdloti Ltd decided to increase the selling price by 10% because the fixed manufacturing costs increased by R27 100 and the variable marketing costs increased by R0.11 per unit sold with effect from 01 December 2021. The company manufactured 150 000 bottles of hand soap during December 2021. There were 27 000 bottles of hand soap…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: (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…Jane Company produces clothes. One of the company's products is Diana Skirts which are sold for $90 each. The standard cost of producing 100 units of Diana skirt is shown below: $ Direct labour 500 Direct material 2,000 Variable production overhead 1,200 Fixed production overhead 1,800 ТОTAL 5,500 • Production and inventory data during the month of October 2021 is given below: Units Unit production 5000 Opening inventory 10,000 Closing inventory 8,000 • The company's normal production is 120,000 units per annum. • Fixed production overhead cost spread evenly over the year. • The fixed selling and distribution cost per year is $78,000. Variable selling and distribution cost is $5.00 per unit. Required: Reconcile the difference in the profits under marginal and absorption costing approaches.
- 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.Midrand Ltd manufactures a single product and makes use of a standard costing system. The following actual figures relate to April 2020: Purchases and issues of raw material: Material A at R0.55 per kg 40 000 kg Material B at R0.80 per kg 29 000 kg Direct labour at R2.10 per hour R 28 770 Manufacturing overheads:Variable R 7 832fixed R 14 200 Standard prime cost per unit is:Material A at R0.50 per kg R0,75Material B at R0.90 per kg R0.90 Direct labour at R2.20 per hour R1.10Standard prime cost of production R 2.75 • Raw material stock is valued at standard…Umdloti Ltd, which manufactures liquid hand soap, commenced operations on 01 November 2021. Standard production for a typical month is expected to be 160 000 bottles. During November 2021 the company manufactured 170 000 bottles of hand soap. On 30 November 2021 there were 46 000 bottles of hand soap in inventory. Manufacturing and commercial costs during November 2021 were as follows: Direct materials R212 500 Direct labour R680 000 Variable manufacturing overheads R37 400 Variable marketing costs R135 160 Fixed administration costs R84 320 Fixed manufacturing overheads R113 900 The hand soap was sold at R12 per bottle during November 2021. During December 2021, Umdloti Ltd decided to increase the selling price by 10% because the fixed manufacturing costs increased by R27 100 and the variable marketing costs increased by R0.11 per unit sold with effect from 01 December 2021. The company manufactured 150 000 bottles of hand soap during December 2021. There were 27 000 bottles…
- Umdloti Ltd, which manufactures liquid hand soap, commenced operations on 01 November 2021. Standard production for a typical month is expected to be 160 000 bottles. During November 2021 the company manufactured 170 000 bottles of hand soap. On 30 November 2021 there were 46 000 bottles of hand soap in inventory. Manufacturing and commercial costs during November 2021 were as follows: Direct materials R212 500 Direct labour R680 000 Variable manufacturing overheads R37 400 Variable marketing costs R135 160 Fixed administration costs R84 320 Fixed manufacturing overheads R113 900 The hand soap was sold at R12 per bottle during November 2021. During December 2021, Umdloti Ltd decided to increase the selling price by 10% because the fixed manufacturing costs increased by R27 100 and the variable marketing costs increased by R0.11 per unit sold with effect from 01 December 2021. The company manufactured 150 000 bottles of hand soap during December 2021. There were 27 000 bottles of hand….a. Millat manufacturing produces two product models: Regular and Special. The following information was taken from the accounting records for the first quarter of 2020.Regular Special TotalUnits produced 80,000 20,000 100,000Material cost Rs. 320,000 Rs. 180,000 Rs. 500,000Labor cost Rs. 480,000 Rs. 140,000 Rs. 620,000Millat currently uses a traditional cost accounting system where total overhead cost is assigned to products based on the total number of units produced. Company president Michael has approached the controller Kashif, with concerns about sagging profit margins and his inability to explain competitors’ pricing of similar products. Kashif suggest that the company explore the possibility of a costing system that is based less on volume and more on identifying the consumption of resources by products. Kashif identifies the following overhead costs related to the production process:Wages and costs related to machine setups Rs. 360,000Material handling costs 480,000 Quality…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…