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QUESTION - Prepare the Income Statement of Voltex Manufacturers for the year ended 31 December 2018 using the: Variable costing method and Absorption costing method.
INFORMATION - Voltex Manufacturers started operations on 02 January 2018 with the intention of producing 60 000 units. However, Voltex Manufacturers produced only 50 000 units of the product and sold only 40 000 units at a selling price of R120 per unit during 2018.
Variable costs totalled R3 600 000 of which 70% were manufacturing and 30% were administration and marketing. Fixed costs totalled R1 200 000 of which 60% were manufacturing and 40% were administration and marketing.
Voltex Manufacturers had no raw materials or work in process inventories at the end of 2018.
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