2.
Income Statement (Marginal Costing)
Six Months ending 31 Six Months ending 30
March 2013 September 2013
Revenue (Sale unit * Selling Price) 980000 1120000
Less: Variable Cost of Sale
Direct Material (Production unit* cost per unit) 238000 196000
Direct Labour (Production unit * cost per unit) 153000 126000
Variable production overhead 25500 21000
Variable cost of production 416500 343000
Inventory Adjustment
Add: Opening Inventory - 73500
Less: Closing Inventory (Unit* Variable cost per unit) (73500) 343000 (24500) 392000
637000 728000
Less: Variable selling, distribution and administration 196000 224000
Contribution 441000 504000
Less:
Fixed production overhead cost (320000/2) 160000 160000
Fixed selling, distribution and Administration cost 100000 (260000) 100000 (260000)
Profit 181000 244000
2. Income Statement (Absorption Costing)
Six Months ending 31 Six Months ending 30
March 2013 September 2013
Revenue 980000 1120000
Less: Total Production cost of sale
Direct Material 238000 196000
Direct Labour 153000 126000
Variable production overhead 25500 21000
Fixed production Overhead 170000 140000
Total Production cost 586500 483000
Inventory Adjustment
Add: opening Inventory - 103500
Less: Closing Inventory (103500) (483000) (34500) (552000)
Gross Profit 497000 568000
Over/Under 170000 140000
160000 10000 160000 (20000)
507000 548000
Less: Non production cost
Variable (196000) (224000)
Fixed (100000) (100000)
Profit 211000 224000
Six Months ending Six Months ending 30
31 March 2013 September 2013
Marginal Costing profit 181000 244000
Add: Closing inventory (1500*20) (500*20) 30000 10000
Less: Opening Inventory - (30000)
Absorption costing profit 211000 224000
3. Profit and Loss Statement (Absorption Costing)
Period I Period II
Revenue 98600 105400
Less: Production cost of sale
Variable Cost 44400 45510
Fixed production overhead 44400 45510
88800 91020
Inventory Adjustment
Add: Opening Inventory - 2960
Less: Closing inventory (2960) (85840) (2220) (91760)
Gross Profit 12760 13640
Over/ under - -
Less: Non-production
overhead
(16800) (16800)
- Fixed
(4040) (3160)
Profit/Loss
Profit And Loss Statement ( Marginal Costing)
Period I Period II
Revenue 98600 105400
Less: Variable cost of Sale
Variable cost 44400 45510
Inventory Adjustment
Add: Opening Inventory - 1480
Less: closing inventory (1480) (42920) (1110) (45880)
Contribution 55680 59520
Less: Production fixed overhead 44400 45510
Non- production fixed overhead 16800 (61200) 16800 (62310)
Profit/ Loss (5520) (2790)
Reconciliation Statement
Period I Period II
Marginal Costing Profit (5520) (2790)
Add: Closing Inventory 1480 1110
Less: Opening inventory - (1480)
Absorption costing profit (4040) (3160)
4. Income Statement (Marginal Costing)
March April
Revenue 52500 105000
Less: Variable cost of sale
Direct Material 16000 25600
Direct labour 10000 16000
Variable production overhead 4000 6400
Variable production cost 30000 48000
Inventory Adjustment
Add: Opening Inventory - 7500
Less: Closing Inventory (7500) (10500)
(22500) (45000)
Less: Variable selling, distribution and (7875) (15750)
administration
Contribution
22125 44250
Less: Fixed production overhead
15000 15000
Fixed selling, distribution and
administration
10000 (25000) 10000 (25000)
Profit /loss
(2875) 19250
4. Income Statement (Marginal costing)
Period 1 Period 2
Revenue 98600 105400
Variable cost 44400 45510
Inventory Adjustment
Opening Inventory 1480
Closing Inventory 1480 42900 1110 45880
Contribution 55680 59520
Less: Fixed production overhead 44400 45510
Non- production overhead 16800 61200 16800 62310
Profit / loss (5520) (2790)
Income Statement ( Absorption Costing)
Period 1 Period 2
Revenue 98600 105400
Variable cost 44400 45510
Fixed Production overhead 44400 45510
88800 91020
Inventory Adjustment
Opening Inventory 2960
Closing Inventory 2960 85840 2220 91760
Gross Profit 12760 13640
Over/Under
Less: Non- production overhead 16800 16800
Profit / loss (4040) (3160)
Reconciliation Statement
Period 1 Period 2
Marginal Costing Profit (5520) (2790)
Add: Closing inventory (Unit * Fixed production overhead) 1480 1110
Less: Opening Inventory - 1480
Absorption Costing profit (4040) (3160)
6.
1. Actual Cost of Production
$ $
Cost of production
Direct Material A ( 6*3000) 18000
Direct Material B (6*3000) 18000
Direct Labour ( 18*3000) 54000
Variable Overhead ( 2* 3000) 6000
Total of variable production cost 96000
Fixed cost 24000
Total cost of production 120000
2. Trading account ( Absorption Costing)
$ $
Revenue ( 3100* 80) 248000
Less: Cost of goods sold
Opening inventory (300*40) 12000
Add : cost of production 120000
132000
Less: Closing Inventory ( 200* 40) (8000)
(124000)
Gross profit 124000
3. Trading Account ( Marginal Costing)
$ $
Revenue ( 3100* 80) 248000
Less: Cost of goods sold
Opening inventory (300*32) 9600
Add : cost of production 120000
129600
Less: Closing Inventory ( 200* 32) (6400) 123200
Gross profit 124800
