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Category > Accounting Posted 22 Jul 2017 My Price 7.00

two accounting periods

A newly formed company has drawn up the following budgets for its first two accounting periods;

 

Period 1

Period 2

Sales units

9 500

10 300

Production units(equivalent to normal capacity)

10 000

10 000


The following budgeted information applies to both periods:

£

Selling price per unit

6.40

Variable cost per unit

3.60

Fixed production overhead per period

15 000

 

(a) In period 1, the budgeted profit will be

(i) The same under both absorption costing and marginal costing.

(ii) £750 higher under marginal costing.

(iii) £750 higher under absorption costing.

(iv) £1400 higher under absorption costing.

(b) In period 2, everything was as budgeted, except for the fixed production overhead, which was £15 700.

The reported profit, using absorption costing in period 2, would be

(i) $12 300

(ii) $ 12 690

(iii) $13 140

(iv) $13 840

Answers

Maurice Tutor
(5)
Status NEW Posted 22 Jul 2017 07:07 PM My Price 7.00

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