KK Ltd makes and sells one product, which has the following standard production cost. GHC Direct Labour (3hrs @ GH¢6 per hour) Direct materials (4kg @ GH¢7 per kg) 18 28 Production overheads: Variable Fixed 20 69 Standard Cost per unit Normal output is 16,000 units per annum. Variable selling, distribution and administration costs are 20 percent of sales value. Fixed selling, distribution and administration costs are GH¢180,000 per annum. There are no units in finished goods inventory at 1 January 2018. The fixed overhead expenditure is spread evenly throughout the year. The selling price per unit is GHg140. Production and sales budgets are as follows: Jan - June 2018 Jul - Dec 2018 Production (units) Sales (units) Required: 1. Prepare Income statement for the 2 periods using 8,500 7,000 8,000 7,000 Marginal Costing and Absorption costing Reconcile the Marginal Costing Profits with Absorption costing profits а. b. 2.

KK Ltd makes and sells one product, which has the following standard production cost. GHC Direct Labour (3hrs @ GH¢6 per hour) Direct materials (4kg @ GH¢7 per kg) 18 28 Production overheads: Variable Fixed 20 69 Standard Cost per unit Normal output is 16,000 units per annum. Variable selling, distribution and administration costs are 20 percent of sales value. Fixed selling, distribution and administration costs are GH¢180,000 per annum. There are no units in finished goods inventory at 1 January 2018. The fixed overhead expenditure is spread evenly throughout the year. The selling price per unit is GHg140. Production and sales budgets are as follows: Jan - June 2018 Jul - Dec 2018 Production (units) Sales (units) Required: 1. Prepare Income statement for the 2 periods using 8,500 7,000 8,000 7,000 Marginal Costing and Absorption costing Reconcile the Marginal Costing Profits with Absorption costing profits а. b. 2.

Name: KK Ltd makes and sells one product, which has the following standard
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Description: KK Ltd makes and sells one product, which has the following standard production cost.GH¢Direct Labour (3hrs @ GH¢6 per hour)Direct materials (4kg @ GH¢7 per kg)1828Production overheads: Variable2069FixedStandard Cost per unitNormal output is 16,000

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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