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.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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(b)
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
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 RM78,000. Variable
selling and distribution cost is RM5.00 per unit.
Transcribed Image Text:(b) 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 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 RM78,000. Variable selling and distribution cost is RM5.00 per unit.
(i)
Prepare Operating Income Statement for the month of October 2021
using Marginal Costing Approach.
(ii)
Prepare Operating Income Statement for the month of October 2021
using Absorption Costing Approach.
Transcribed Image Text:(i) Prepare Operating Income Statement for the month of October 2021 using Marginal Costing Approach. (ii) Prepare Operating Income Statement for the month of October 2021 using Absorption Costing Approach.
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