Reference no: EM132608068
A company manufactures and sells a single product. Budgeted costs for a period are:
per unit for the period
Direct materials $ 5·60
Direct labour $ 4·20
Variable production overhead $ 0·70
Variable administration overhead $ 0·50
Fixed production overhead $ 78,000
Fixed administration overhead $ 42,000
If absorption costing is used, the predetermined fixed production overhead absorption rate will be $ 6.50 per unit based on budgeted production of 12,000 units.
During the period 12,800 units of the product were manufactured. 12,300 units were sold at an average price of $ 24 per unit. Actual costs in the period were as budgeted.
Question 1: Using marginal costing, prepare profit statement to show the actual results for the period.