Jaime Ltd manufactures and sells a small electric product to order for the computer industry. The estimated selling price and variable costs per unit for next year are as follows: (£ per unit) Selling price 654.00 Variable costs: Direct materials 216.00 Direct labour 108.00 Production overhead 54.00 Selling & distribution overhead 27.00 Jaime Ltd expects to sell 108,000 units next year. Jaime Ltd expects the stock level at the start of the year to be NIL and the stock at the end of the year to be 18,000 units. Information on fixed costs is as follows: Fixed costs: £ Production overhead 1,452,000 Selling & distribution 360,000 Administration overhead 342,000 Question: (a) Using absorption costing: (i) Calculate the production cost per unit. (ii) Prepare an income statement for the year.
Jaime Ltd manufactures and sells a small electric product to order for the computer industry. The estimated selling price and variable costs per unit for next year are as follows:
|
(£ per unit) |
|
|
Selling price |
654.00 |
|
Variable costs: |
|
|
Direct materials |
216.00 |
|
Direct labour |
108.00 |
|
Production overhead |
54.00 |
|
Selling & distribution overhead |
27.00 |
Jaime Ltd expects to sell 108,000 units next year. Jaime Ltd expects the stock level at the start of the year to be NIL and the stock at the end of the year to be 18,000 units. Information on fixed costs is as follows:
|
Fixed costs: |
£ |
|
Production overhead |
1,452,000 |
|
Selling & distribution |
360,000 |
|
Administration overhead |
342,000 |
Question:
(a) Using absorption costing:
(i) Calculate the production cost per unit.
(ii) Prepare an income statement for the year.
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Could you explain please how you calculated Ending iventory - y can see you result is 7173000 but cant get how was obtained. Thanks
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