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Question - The following data has been extracted from last quarter's budget of Elise Ltd, which manufactures and sells a single product.
January
February
March
Production units
6200
5800
Sales units
5900
6000
5500
The variable production cost per unit is $40 and each unit incurs 1 hour and 30 minutes of labour. Fixed production overhead to be absorbed in each unit has already been calculated and is $20 per labour hour. In February, Elise Ltd,recorded a loss of $4,000 under marginal costing principles.
Required - What would have been the budgeted profit or loss figure in February if Elise Ltd used absorption costing principles instead?
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