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Management Accounting Solution

   

Added on  2021-04-24

16 Pages3081 Words23 Views
1Management Accounting

2Solution to P3:Information Given Direct Material cost per unit13per unitDirect labour cost10per unitVariable expenses7per unitFixed indirect manufacturing cost92000per yearOther overheads:Distribution Expenses24000per yearAdministrative Expenses89000per yearInterest ExpensesYear 11100Year 21000Year 3nilTax Rate19%SalesYear 12600unitsYear 23500unitsYear 33200unitsSale Price per unit85per unitProductionYear 13500unitsYear 23800unitsYear 33650unitsWorking NoteTotal Variable cost per unitDirect Material cost 13Direct labour cost10Variable expenses7Variable cost per unit30Income Statement Under Absorption CostingYear 1

3ParticularsAmountAmountSales (2600*85)221000.00Less: Cost of Goods SoldOpening Stock ( 0 units)0.00Production (3500 units * 30)105000.00Less: Closing Stock (900 units *30)-27000.00Less: Fixed Indirect manufacturing cost68342.86(92000 * 2600/3500)Total cost of goods sold146342.86Gross profit74657.14Less: Other OverheadsDistribution Expenses24000Administrative Expenses89000113000Net loss before interest and taxes-38342.86Less: Interest expenses1100Net Loss before tax-39442.86Add: Tax @ 19%-7494.1429Net loss-31948.71Income Statement Under Absorption CostingYear 2ParticularsAmountAmountSales (3500*85)297500.00Less: Cost of Goods SoldOpening Stock ( 900 units)27000.00Production (3800 units * 30)114000.00Less: Closing Stock (1200 units*30)-36000.00Less: Fixed Indirect manufacturing cost

4Opening (900/3500) *9200023657.14Production (2600/3800)*9200062947.37Total cost of goods sold191604.51Gross profit105895.49Less: Other OverheadsDistribution Expenses24000Administrative Expenses89000113000Net loss before interest and taxes-7104.51Less: Interest expenses1000Net Loss before tax-8104.51Add: Tax @ 19%-1539.8571Net loss-6564.65Income Statement Under Absorption CostingYear 3ParticularsAmountAmountSales (3200*85)272000.00Less: Cost of Goods SoldOpening Stock ( 1200 units *30)36000.00Production (3650 units * 30)109500.00Less: Closing Stock (1650 units*30)-27000.00Less: Fixed Indirect manufacturing costOpening (1200/3800) *9200023657.14Production (2000/3650)*9200050410.96Total cost of goods sold192568.10Gross profit79431.90Less: Other OverheadsDistribution Expenses24000Administrative Expenses89000113000

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