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A company plans to produce and sell 50,000 units of it regular product during the...

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Accounting

A company plans to produce and sell 50,000 units of it regular product during the coming month at GH12 per unit. A unit of the product requires 5kg of material valued at GH0.5 per kg and 3 hours of direct labour paid at GH0.75 per hour. Selling and distribution cost is budgeted at GH50.000 variable and GH60.000 fixed. Fixed production overheads is budgeted at GH80.000 and GH40.000 for administration.

Required

  1. Calculate the product cost per unit under the following costing basis;
    1. Absorption Costing
    2. Marginal Costing
  2. Prepare a budgeted profit statement for the coming month under the following costing basis;
    1. Absorption Costing
    2. Marginal Costing
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