Management Accounting

Management Accounting

A) Marginal costing
Marginal Costing Profit/Income Statement For The Month June
Quantity
Price per
unit £ £
Sales revenue 1500 £35 £52,500
Less: COGS
Direct materials 2000 £7 £14,000
Direct labor 2000 £7 £14,000
Direct expenses 2000 £8 £16,000
Variable selling and
distribution expenses £7,875
Less: Closing stock
Direct materials 500 £7 £3,500
Direct labor 500 £7 £3,500
Direct expenses 500 £8 £4,000 £40,875
Contribution £11,625
Less: Periodic cost
Fixed production overhead 36000 £22
£792,00
0
Fixed selling expenses
£120,00
0
Annually
£912,00
0
Per month = Annually/12 £76,000 £76,000
Net Loss -£64,375
B) Absorption costing
Absorption Costing Profit/Income Statement For The Month June
Quantity
Price per
unit £ £
Sales revenue 1500 £35 £52,500
Less: COGS
Direct materials 2000 £7 £14,000
Direct labor 2000 £7 £14,000
Direct expenses 2000 £8 £16,000
Standard production cost 2000 £22 £44,000
Less: Closing stock
Direct materials 500 £7 £3,500
Direct labor 500 £7 £3,500
Direct expenses 500 £8 £4,000