cost accounting
Baker Asia produces and sells a single product, “Cheese Brownies”. The following data have been extracted from its budget and standard cost for the year 2019:
RM
Selling price per unit 80
Manufacturing cost:
Variable per unit produced 15
Direct materials 7
Variable overhead 4
Fixed production overhead costs are budgeted at RM 180,000 per annum. Normal production levels are expected to be 9,000 units per annum.
Budgeted selling and administrative cost are as follows:
Variable per unit sold 6
Fixed per year 30,000
Year 1 Year 2
Unit in beginning inventory 0 ?
Units produced during the year 10,000 6,000
Units sold during the year 8,000 8,000
You are required to:
(a) Calculate the total product cost using:(4marks)
(i) Marginal costing
(ii) Absorption costing
(b) Prepare income statement for Baker Asia using:(20marks)
(i) Marginal costing
(ii) Absorption Costing.
(c) Comment the reason(s) of why absorption costing is preferable than marginal costing.
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marginal costing & absorption costing
Baker Asia produces and sells a single product, “Cheese Brownies”. The following data have been extracted from its budget and standard cost for the year 2019: RMSelling price per unit 80Manufacturing cost: Variable per unit produced 15Direct materials 7 Variable overhead 4 Fixed production overhead costs are budgeted at RM 180,000 per annum. Normal production levels are expected to be 9,000 units per annum. Budgeted selling and administrative cost are as follows:Variable per unit sold ...
marginal costing & absorption costing
Baker Asia produces and sells a single product, “Cheese Brownies”. The following data have been extracted from its budget and standard cost for the year 2019: RMSelling price per unit 80Manufacturing cost: Variable per unit produced 15Direct materials 7 Variable overhead 4 Fixed production overhead costs are budgeted at RM 180,000 per annum. Normal production levels are expected to be 9,000 units per annum. Budgeted selling and administrative cost are as follows:Variable per unit sold ...
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