Homework Answers
| 1. COST OF EACH UNIT (REFER W.N.) | $ 20 EACH UNIT |
| 2. UNIT REMAIN IN ENDING INVENTORY |
1900 (51000 - 49100) |
| COST OF ENDING INVENTORY (REFER W.N.) | $38000 |
| 3. ABSORPTION COSTING INCOME STATEMENT | IN $ |
| SALES (49100 x 27.50) | 1350250 |
| LESS: COGS (REFER W.N.) | (982000) |
| 368250 | |
| LESS:MARKETING COST {(49100 x 1.70) + 132100} | (215570)` |
| PROFIT | 152680 |
WORKING NOTE:-
CALCULATION OF COST OF GOODS SOLD FOR OCTOBER:-
| ABSORPTION COSTING | (IN $) |
| PARTICULARS | AMOUNT |
| DIRECT MATERIALS (51000 x 6) | 306000 |
| DIRECT LABOUR (51000 x 4) | 204000 |
| VARIABLE OVERHEAD (51000 x 2) | 102000 |
| FIXED OVERHEAD | 408000 |
| 1020000 | |
| ADD: OPENING STOCK | ---- |
| LESS: CLOSING STOCK (51000 - 49100) |
(38000) 1020000/51000 x 1900 |
| COST OF GOOD SOLD | 982000 |
| COST OF EACH UNIT PRODUCED (1020000/51000) | 20 |
FOR NOVEMBER:
| COST OF EACH UNIT (REFER W.N.) | $ 20 EACH UNIT |
| UNIT REMAIN IN ENDING INVENTORY |
1900 (51000 +1900 - 52000) |
| 4. COST OF ENDING INVENTORY (REFER W.N.) | $18000 |
| 5. ABSORPTION COSTING INCOME STATEMENT | IN $ |
| SALES (52000 x 27.50) | 1430000 |
| LESS: COGS (REFER W.N.) | (1040000) |
| 390000 | |
| LESS:MARKETING COST {(52000 x 1.70) + 132100} | (220500)` |
| PROFIT | 169500 |
WORKING NOTE:-
CALCULATION OF COST OF GOODS SOLD FOR NOVEMBER:-
| ABSORPTION COSTING | (IN $) |
| PARTICULARS | AMOUNT |
| DIRECT MATERIALS (51000 x 6) | 306000 |
| DIRECT LABOUR (51000 x 4) | 204000 |
| VARIABLE OVERHEAD (51000 x 2) | 102000 |
| FIXED OVERHEAD | 408000 |
| 1020000 | |
| ADD: OPENING STOCK (1900 x 20) | 38000 |
| LESS: CLOSING STOCK (51000 + 1900 - 52000) |
(18000) 1020000/51000 x 900 |
| COST OF GOOD SOLD | 1040000 |
| COST OF EACH UNIT PRODUCED (1020000/51000) | 20 |
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