90.2K

Verified Solution

Link Copied!

Q1

CoursHeroTranscribedText: Perunit: RM Selling price 80 Productioncosts: Direct materials 20.00 Direct labour 12.00 Variable factory overheads 4.00 Fixed selling costs per quarter 600,000 Fixed production costs per quarter 270,000 Actual details for the months are as follows: April May hine Productionin units 120,000 131,600 128,000 Sales inunits 112,000 1 19,20 0 120, 80 0 Additional information (i) The opening inventory on 1 April 2019 was 21,000 units. (ii) All the fixed costs would be increased by 40%% for the entire second quarter respectively. (iii) Fees paid for sales brochure (variable administration cost) will increase 30%% when total unit sales exceed target 110,0100 units, and 40%%when exceed target 115,000 (iv) The management will reward the sales staff with 10% of sales boris when target 115,000 units is achieved (v) The administration costs and sales borns will be calculated based on percentage of total sales values for each month. Required Prepare an income statement for each of the three months ended 30 June 2019, using marginal costing method. Part Two The factory has the policy of giving out RM100 coupon to each of the workers every month. The management forecasts that the coupon amount will be increasing steadily by 15% every year as the production capacity continues to moderately increase over the next 3 years. Required: Identify and describe the type of cost behavior of the coupon in both short term and long term with simple chart(s)

Answer & Explanation Solved by verified expert

See Answer