i)Calculation of Unit Product Cost- Absorption Costing
|
Direct Material |
$ 8.00 |
|
Direct Labor |
$ 4.00 |
|
Variable Manufactured |
$ 2.00 |
|
Fixed Manufactured Cost |
$ 3.60 |
|
Cost per unit |
$ 17.60 |
Calculation of Unit Product Cost- Marginal Costing
|
Direct Material |
$ 8.00 |
|
Direct Labor |
$ 4.00 |
|
Variable Manufactured |
$ 2.00 |
|
Cost per unit |
$ 14.00 |
ii) Income Statement- Absorption Costing
|
Sales |
|
$ 180,000.00 |
|
Cost of Production |
$
176,000.00 |
|
|
Less: Closing Inventory |
$
(17,600.00) |
|
|
Cost of Goods Sold |
|
$
158,400.00 |
|
Gross Profit |
|
$ 21,600.00 |
|
Selling and administration cost |
|
$ 5,000.00 |
|
Net Profit |
|
$ 16,600.00 |
Income Statement- Marginal Costing
|
Sales |
$ 180,000.00 |
|
Variable Cost |
$
126,000.00 |
|
Contribution Margin |
$ 54,000.00 |
|
Fixed Cost |
$ 41,000.00 |
|
Net Profit |
$ 13,000.00 |
