Reference no: EM132634363
The president of Toblerone, Inc. has been reviewing the income statements of the two most recent months. She is puzzled because sales rose and profits fell in March, and she asks you, the controller, to explain.
February March
Sales (P30 per case) P 540,000 P 660,000
Standard cost of sales 270,000 330,000
Standard gross profit P 270,000 P330,000
Volume variance 40,000 (50,000)
Selling and administrative expenses (150,000) (150,000)
Income P160,000 P130,000
The standard fixed cost per case is P10, based on normal capacity of 20,000 cases per month.
REQUIRED:
Question 1) Determine production in each month.
Question 2) Prepare the income statement using variable costing.