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Make marginal and absorption income statement

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Reference no: EM132617485

Problem 1: Prepare marginal and absorption income statement based on the following information:

Per unit: RM

Selling price            45

Direct materials        11

Direct labour               8

Production overhead:

Variable                       4

Fixed                            3

Selling overhead:

Variable                        5

Fixed                             2

Administration overhead:

Fixed                            3

Fixed production overhead costs per unit are based on a normal monthly activity level of 8,000 units. These costs are expected to be incurred at a constant rate throughout the month. Activity levels during April and May are as follows:

                                   April                    May
Sales (units)             7,000             8,750
Production (units)       8,500              7,750

There are no stocks held on 1 April.

Reference no: EM132617485

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