Calculate the profit under marginal and absorption costing

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Question - Big Woof Co. manufactures a single product, Z. Cost and selling price details for product Z are as follows:

Rs per Unit

Direct materials 6.00

Direct Labour 7.50

Variable overhead 2.50

Fixed overhead absorption rate 5.00

21.00

Profit 9.00

Selling price 30.00

The following additional information is also available:

Budgeted production for the month was 5,000 units although the company managed to produce 5,800 units, selling 5,200 of them and incurring fixed overhead costs of Rs 27,400.

Required - Calculate the profit under marginal and absorption costing method for the month.

Reference no: EM132608028

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