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Problem - For Year 2000, Rider Ltd produced 100,000 units and sold 75,000 units. There was no opening inventory. Costs incurred for the production of 100,000 units are:
Direct materials
150,000
Direct labour
187,500
Variable manufacturing overhead
100,000
Variable selling and general expenses
Fixed manufacturing overhead
200,000
Fixed administrative expenses
Required -
(a) Compute the cost of the ending finished goods inventory under both absorption and marginal costing.
(b) Compute the cost of goods sold under absorption and marginal costing.
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