Reference no: EM132616109
Question - UBS Ltd began operations on 1 January, and achieved the following results for the year:
Sales 24000 units
Selling Price $30 per unit
Manufacturing costs:
Direct materials $8 per unit
Direct labour $4 per unit
Variable overhead $6 per unit
Fixed manufacturing overhead $200,000
Selling and administrative costs:
Variable $2 per unit sold
Fixed $20,000
Production 25000 units
Required -
1. Prepare absorption costing income statement for UBS Ltd.
2. Prepare variable costing contribution margin statement for UBS Ltd.
3. Reconcile the differences between the profits under the two statements by using the short-cut method.