Reference no: EM132935947

QUESTION - The following formation was extracted from the accounting records of Tommy Ltd for the year ended 29 February 2020. The company utilises the Fist-In First-Out method of inventory valuation.

Units

Inventory at the beginning of the year

NIL

Production for the year 12 000

Sales for the year (at R720 per unit) 11 400

MASTER OF BUSINESS ADMINISTRATION - ACADEMIC AND ASSESSMENT CALENDAR - DISTANCE

REGENT BUSINESS SCHOOL (RBS) - January 2021 14 R

Direct material cost per unit 50

Direct labour cost per unit 120

Variable manufacturing overhead per unit 60

Variable selling and administrative cost per unit 20

Fixed manufacturing overhead cost 220 000

Fixed selling and administrative cost 140 000

Required -

1. Prepare the Statement of Income and Expenditure using the marginal / variable costing method.

2. Prepare the Statement of Income and Expenditure using the absorption costing method.