Below is the manufacturing income stalement for Mac Sdn Bbd Selling price per un

Question

Below is the manufacturing income stalement for Mac Sdn Bbd Selling price per unit Variable production costs per unit Direct material Direct labor Variable overhead $2,000 $600 225 Variable selling expemse per unit Contribution margin per unit 900 40 1060 Fixed manufacturing overhead per year Fixed selling expense Fixed administrative expense $1,200,00 $100,00 $500000 Note 1. During the year the quantity Produced is 5000unit and Quantity sold is 5000. 2. Unit produced is 6000 and Unit sold is 4800. Use Absorption and Marginal cost approach to draw up the income statement for Mac Sdn Bhd.

Explanation / Answer

(1). When produced and sold 5000 units;

Marginal Costing Income Statement

Sales revenue (5000 * $2000)

$10000000

Less: Cost of goods sold;

Direct materials (5000 * $600)

$3000000

Direct labor (5000 * $225)

$1125000

Variable overhead (5000 * $75)

$375000

Variable selling expenses (5000 * $40)

$200000

Contribution margin

$5300000

Less: Fixed costs;

Fixed manufacturing overheads

$1200000

Fixed selling expenses

$100000

Fixed administrtive expenses

$500000

Net income

$3500000

Absorption Costing Income Statement

Sales revenue (5000 * $2000)

$10000000

Less: Cost of goods sold;

Direct materials (5000 * $600)

$3000000

Direct labor (5000 * $225)

$1125000

Variable overhead (5000 * $75)

$375000

Fixed manufacturing overhead

$1200000

Gross profit

$4300000

Less: Selling and Adminitrative expenses;

Variable selling expenses (5000 * $40)

$200000

Fixed selling expenses

$100000

Fixed administrtive expenses

$500000

Net income

$3500000

(2). When produced 6000 units and sold 4800 units;

Marginal Costing Income Statement

Sales revenue (4800 * $2000)

$9600000

Less: Cost of goods sold;

Direct materials (4800 * $600)

$2880000

Direct labor (4800 * $225)

$1080000

Variable overhead (4800 * $75)

$360000

Variable selling expenses (4800 * $40)

$192000

Contribution margin

$5088000

Less: Fixed costs;

Fixed manufacturing overheads

$1200000

Fixed selling expenses

$100000

Fixed administrtive expenses

$500000

Net income

$32880000

Absorption Costing Income Statement

Sales revenue (4800 * $2000)

$9600000

Less: Cost of goods sold;

Direct materials (4800 * $600)

$2880000

Direct labor (4800 * $225)

$1080000

Variable overhead (4800 * $75)

$360000

Fixed manufacturing overhead ($1200000 * 4800 / 6000)

$960000

Gross profit

$4320000

Less: Selling and Adminitrative expenses;

Variable selling expenses (4800 * $40)

$192000

Fixed selling expenses

$100000

Fixed administrtive expenses

$500000

Net income

$3528000

Marginal Costing Income Statement

Sales revenue (5000 * $2000)

$10000000

Less: Cost of goods sold;

Direct materials (5000 * $600)

$3000000

Direct labor (5000 * $225)

$1125000

Variable overhead (5000 * $75)

$375000

Variable selling expenses (5000 * $40)

$200000

Contribution margin

$5300000

Less: Fixed costs;

Fixed manufacturing overheads

$1200000

Fixed selling expenses

$100000

Fixed administrtive expenses

$500000

Net income

$3500000

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.