Moona Inc. produces Mobile phones. Information of the company's operations last year appears below: ...
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Accounting
Moona Inc. produces Mobile phones. Information of the company's operations last year appears below:
| Fixed cost: |
|
| Fixed Manufacturing overhead | Rs 40,000 |
| Fixed selling & Administrative | Rs 60,000 |
| Selling Price per unit | Rs 100 |
| Variable cost per unit: |
|
| Direct Materials | Rs 30 |
| Direct labor | Rs 10 |
| Variable Manufacturing overhead | Rs 5 |
| Variable selling & Administrative | Rs 2 |
|
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| Units In beginning Inventory | 0 |
| Units Produced | 2000 |
| Units sold | 1900 |
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Required: a. Compute the unit product cost under both absorption and variable costing.(2 Marks) b. Prepare an income statement for the year using absorption costing.( 3 Marks) c. Prepare a contribution format income statement for the year using variable costing.(3 Marks) d.Prepare a report reconciling the difference in net operating income between absorption and variable costing for the year. (2 Marks)
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