Using the information below, list profit statements for June and July using (a) margin
costing and (b) absorption costing.
A company produces and sells 1 product only which sells for Rs. 50 per unit. There were no stocks at the end of May and other information is as follows:
Rs.
Standard cost per unit
Direct material 18
Direct wages 4
Variable production overhead 3
Budgeted and actual fixed costs per month
Fixed production overhead 99,000
Fixed selling expenses 14,000
Fixed administration expenses 26,000
Variable selling expenses 10% of sales value
Normal capacity is 11,000 units per month.
The number of units produced and sold was:
June July
Units units
Sales 12,800 11,000
Production 14,000 10,200