ARBWOY Ltd is a company that produces fruit juice which is bottled and sold in crates. The normal annual level of production on which the fixed production overhead absorption is based is 120,000 crates. Production 145,000 crates Sales 112,000 crates Selling price GHS2,000 per crate Costs: Direct material GHS600 per unit Direct labour GHS520 per unit Variable overhead GHS250 per unit Fixed production overhead GHS1,820,000 Variable selling and distribution cost 10% of sales revenue Fixed selling and distribution cost GHS234,000 Note: Show workings and leave all monetary computations in 2 decimal places Required: Prepare Profit Statements for the year ended 31st December, 2018 based on: (a) Marginal Costing (b) Absorption Costing (c) Reconcile the profit figures in (a) and (b) above

Question

ARBWOY Ltd is a company that produces fruit juice which is bottled and sold in crates. The normal annual level of production on which the fixed production overhead absorption is based is 120,000 crates. Production 145,000 crates Sales 112,000 crates Selling price GHS2,000 per crate Costs: Direct material GHS600 per unit Direct labour GHS520 per unit Variable overhead GHS250 per unit Fixed production overhead GHS1,820,000 Variable selling and distribution cost 10% of sales revenue Fixed selling and distribution cost GHS234,000 Note: Show workings and leave all monetary computations in 2 decimal places Required: Prepare Profit Statements for the year ended 31st December, 2018 based on: (a) Marginal Costing (b) Absorption Costing (c) Reconcile the profit figures in (a) and (b) above

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