Gary Ltd. manufactures a product for which the budgeted capacity is 392,000 units per month. The following data is available for August 2019: Details Units Sales 320,000 Opening stock 60,000 Closing stock 160,000 Production 420,000 Cost Data Details $ Direct materials 55 Direct labour 22 Variable Production Overheads 41 Fixed administrative overheads were estimated at $ 600,000 while fixed selling overheads were estimated at $840,000. During the periods, the selling price per unit was $180 and Total Fixed Production Overheads were $5,880,000.
Gary Ltd. manufactures a product for which the budgeted capacity is 392,000 units per month. The following data is available for August 2019:
|
Details |
Units |
|
Sales |
320,000 |
|
Opening stock |
60,000 |
|
Closing stock |
160,000 |
|
Production |
420,000 |
Cost Data
|
Details |
$ |
|
Direct materials |
55 |
|
Direct labour |
22 |
|
Variable Production |
41 |
Fixed administrative overheads were estimated at $ 600,000 while fixed selling overheads were estimated at $840,000. During the periods, the selling price per unit was $180 and Total Fixed Production Overheads were $5,880,000.
Required:
(a) Show the profit situation using Marginal costing principles
(b) Show the profit situation using Absorption costing principles
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