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QUESTION 2
Bolte Manufacturing operations for 2017 are as follows:
$
Per unit:
Sales price 50
Direct material cost 18
Direct wages 4
Variable production overhead 3
Per month:
Fixed production overhead 99 000
Fixed selling expenses 14 000
Fixed administration expenses 26 000
Variable selling expenses is 10% of sales value.
Normal capacity was 11 000 units per month.
January February
Units Units
Sales 10 000 12 000
Production 12 000 10 000
Using the two methods:
- Compute the unit production cost (4 marks)
- Determine the value of the closing inventory (7 marks)
Prepare the Marginal Income Statement and the Absorption Income Statement for March and April
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