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Question - Woolly ltd started business on 1st December 2016 the output of the product S at selling price of RM 80. The direct material used for a unit of production is 4kg at cost of RN 3 per kg and direct labour hours involved in a unit of production is 3 hours with payment of RM 6 per hour. The lubricant involved for labour hour in RM 2 with rental payment of RM 3 per labour hours. Selling and administrative overheads per month is RM 20,000. Normal capacity level per month is 3000 units. Actual results: November December production (units) 3,500 2,500 sales (units) 3,000 2,600
a) Determine the total standard cost per unit of product S.
b) Prepare profit and loss statement for November and December 2016, using marginal cost method.
C) Describe two arguments over application of marginal costing.
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