Reference no: EM132560626

Solo Limited makes and sells a single product . The following data relate to periods 1 to 4

sh.Variable cost per unit 30
Selling price per unit 55
Fixed costs per period 6,000

Normal activity is 500 units and production and sales for the four periods are as follows :

                      Period 1 units                Period 2 units            Period 3 units                  Period 4 units

Sales                      500                          400                            550                         450
Production                500                           500                            450                        500

There were no opening stocks at the start of period 1

Required

Question a) Prepare operating statements for each of the periods 1 to 4 , based on marginal costing principles.

Question b) Prepare operating statements for each of the periods 1 to 4 , based on absorption costing principles.

Question c) Comment briefly on the results obtained in each period and in total by the two systems.