Prepare an income statement for Dec

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Reference no: EM133044771

Problem - You have been appointed as the Management Accountant for Modern Ltd that produces and sells two products, Product X and Product Y. The following information is available for Dec 2020:

 

Product X

Product Y

Production (units)

5,000

3,500

Sales (units)

4,600

3,200

Opening Inventory (units)

0

0

 

 

 

Financial Data:

Product X

Product Y

Unit selling price

£180.00

£150.00

Unit cost:

 

 

direct materials

£30.00

£24.00

direct labor

£36.00

£24.00

variable production overheads

£24.00

£16.00

fixed production overheads

£60.00

£40.00

variable selling overheads

£2.00

£2.00

Fixed production overheads for the period were £210,000 and fixed administration overheads were £54,000.

Required - Calculate costs using appropriate techniques of cost analysis to

(a) Prepare an income statement for Dec 2020 based on marginal costing Principles.

(b) Prepare an income statement for Dec 2020 based on absorption posting principles.

(c) Produce financial reports (income statements) that accurately apply and interpret data for complex business activities and provide an accurate interpretation and analysis on the performance for the month of Dec 2020.

Reference no: EM133044771

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