Solution-Generate profit statement using marginal costing

Generate profit statement using marginal costing technique

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Reference no: EM132971956

Question - Stars Ltd. produces computers. Managers of Stars Ltd. estimate to produce 400 computers and estimate to have total overheads of 200,000. The actual production level was 20% higher than estimated and the actual fixed production overheads equal 210,000. The fixed non-production costs equal 12,000. Stars Ltd. sells 200 computers for a price of $1,500 per unit. The variable production cost per unit is E100. The opening stock of computers for Stars Ltd. equals 300 computers.

Required -

a) Generate the profit statement using the marginal costing technique.

b) Generate the profit statement using the absorption costing technique.

c) Explain the differences between both profit statements.

d) Which can be the reasons for the differences between the absorbed overheads and the actual overheads?

Reference no: EM132971956

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Generate profit statement using marginal costing technique

Reference no: EM132971956

Reference no: EM132971956

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