During the most recent year, Boston (PTY) Ltd has produced the following data: Beginning inventory Units produced 15 400 Units...

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Accounting

During the most recent year, Boston (PTY) Ltd has produced thefollowing data:
Beginning inventory
Units produced 15 400
Units sold (R125 per unit) 8 200
Variable costs per unit:
Direct materials R13
Direct Labor R16
Variable Overheads R8
Fixed Costs
Fixed overhead per unit produced R23
Fixed selling and administrative R18 500
Required:
1. How many units are in ending inventory
2. Using absorption costing, calculate the per unit -productcost. What is the value of ending inventory?
3. Using variable costing, calculate the per unit -product cost.What is the value of ending inventory?
4. Prepare an income statement using variable costing.
5. Prepare an income statement using absorption costing.

Answer & Explanation Solved by verified expert

3.8 Ratings (636 Votes)

1 Total number of units in ending inventory would be Beginning of inventory Nil add Number of units produced 15400 less Number of units sold 8200 Number of units at the end of inventory 7200 2 Using absorption costing per unit cost would be Direct See Answer

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Beginning inventory
Units produced	15 400
Units sold (R125 per unit)	8 200
Variable costs per unit:
Direct materials	R13
Direct Labor	R16
Variable Overheads	R8
Fixed Costs
Fixed overhead per unit produced	R23
Fixed selling and administrative	R18 500