Jane Company produces clothes. One of the company's products is Diana Skirts which are sold for $90 each. • The standard cost of producing 100 units of Diana skirt is shown below: Direct labour 500 Direct material 2,000 Variable production overhead 1,200 Fixed production overhead 1,800 ТОTAL 5,500 • Production and inventory data during the month of October 2021 is given below: Units Unit production 5000 Opening inventory 10,000 Closing inventory 8,000 • The company's normal production is 120,000 units per annum. • Fixed production overhead cost spread evenly over the year. • The fixed selling and distribution cost per year is $78,000. Variable selling and distribution cost is $5.00 per unit. Required: Prepare Operating Income Statement for the month of October 2021 using Absorption Costing Approach.
Jane Company produces clothes. One of the company's products is Diana Skirts which are sold for $90 each. • The standard cost of producing 100 units of Diana skirt is shown below: Direct labour 500 Direct material 2,000 Variable production overhead 1,200 Fixed production overhead 1,800 ТОTAL 5,500 • Production and inventory data during the month of October 2021 is given below: Units Unit production 5000 Opening inventory 10,000 Closing inventory 8,000 • The company's normal production is 120,000 units per annum. • Fixed production overhead cost spread evenly over the year. • The fixed selling and distribution cost per year is $78,000. Variable selling and distribution cost is $5.00 per unit. Required: Prepare Operating Income Statement for the month of October 2021 using Absorption Costing Approach.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter2: Basic Cost Management Concepts
Section: Chapter Questions
Problem 21E: Ellerson Company provided the following information for the last calendar year: During the year,...
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