L 54% Crystal Lid makes and sells two products, Omega and Sigma. The following information...
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Accounting
L 54% Crystal Lid makes and sells two products, Omega and Sigma. The following information is available for period 3: Production (units) Sales (units) Opening stock (units) Budgeted capacity (units) Financial Data Omega Sigma 6.000 7.500 5.500 5.800 1000 1500 4000 3000 Omega Sima 800 850 Unit selling price Unit cost: Direct materials Direct labour Variable production overheads 300 50 100 450 150 200 200 550 Fixed production overheads 60 10 Fixed administration overheads were 5980,000 and Fixed selling overheads were $720,000 As the Cost Accountant you have been asked to do the following: Prepare an income statement based on marginal costing principles (11 marks) b. Prepare an income statement based on absorption costing principles (14 marks) c. Reconcile profit statements for both techniques (3 marks) d. Management is planning on launching a marketing campaign to increase the sales of the product that is more profitable. Advise management on the product they should focus on increasing sales for. (2 marks)
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