Follow Our FB Page << CircleMedia.in >> for Daily Laughter. We Post Funny, Viral, Comedy Videos, Memes, Vines...

1. During the current period, ABC Ltd sold 60,000 units of
product at Rs. 30 per unit. At the
beginning for the period, there were 10,000 units in
inventory and ABC Ltd manufactured
50,000 units during the period. The manufacturing costs and
expenses were as follows:
Total cost Number of units Unit cost
Rs. Rs.
Beginning inventory:
Direct materials 67,000 10,000 6.70
Direct labour 1,55,000 10,000 15.50
Variable factory overhead 18,000 10,000 1.80
Fixed factory overhead 20,000 10,000 2.00
Total 2,60,000 26.00
Current period costs:
Direct materials 3,50,000 50,000 7.00
Direct labour 8,10,000 50,000 16.20
Variable factory overhead 90,000 50,000 1.80
Fixed factory overhead 1,00,000 50,000 2.00
Total 13,50,000 27.00
Variable 65,000
Fixed 45,000
Total 1,10,000
Instructions:
1. Prepare an income statement based on the variable
costing concept.
2. Prepare an income statement based on the absorption
costing concept.
3. Give the reason for the difference in the amount of
income from operations in 1 and
2.

Answers were Sorted based on User's Feedback

1. During the current period, ABC Ltd sold 60,000 units of product at Rs. 30 per unit. At the beg..

2. Statement of absorption costing concept:

Total Sales : 60000X30= 18,00,000
Total EXP : 2,60,000+13,50,000=16,10,000
Total Advt Exp : 65000+45000 = 1,10,000

=18,00,000-16,10,000-1,10,000
Total Income : 80,000

 Is This Answer Correct ? 0 Yes 0 No

1. During the current period, ABC Ltd sold 60,000 units of product at Rs. 30 per unit. At the beg..

 Is This Answer Correct ? 0 Yes 1 No

1. During the current period, ABC Ltd sold 60,000 units of product at Rs. 30 per unit. At the beg..

variable costing income statment :

sale (60000x30) 18,00,000
less variable cost of good sold :
begning inventory (1000x24) 2,40,000
variable good manufacting(5000x25)12,50,000

variable good sold : 14,90,000

manufacturing gain 3,10,0000

less: variable selling and adm, exp 65000

contribution margin 2,45,000

less fixed cost
fixed manufacturing cost 100000
fixed selling and adm ,exp 45000
total f cost 145000

income on variable concept 100000

part(2)statment of absorption costing concept:

sale(6000x30) 18,00,000

cost of good sold :

begning inventry(1000x26) 2,60,000
cost of good uses(5000x27)13,50,000

less cost of good sold 16,10,000

gross profit 1,90,000

total income 80,000

give me answer of third questions

ok byee dear

 Is This Answer Correct ? 0 Yes 1 No

More Accounting General Interview Questions

What is the treatment of preliminary? is this current assets?

how to pass the entry of advance paid to employee against salary

How can i write off bad debt in tally erp9 ?

What is the Major Difference between Revised Schedule VI and Old Schedule VI ?

what is consignment entry?

why net profit add in capital in balance sheet

What is personal account?

meaning of capital

what is cash book

Rent is direct income or indirect income

What is the depreciation rates for all the assets?like plant & Machinery,computers,software,land & buildings

How can I pass the journal entry for Work in progress. I would like to know that where should be the debit and credit allocated in accounting system. eg. WIP debit will be under asset a/c in balance sheet what about credit? pls.help me

Categories