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Question 1: Pamlico Manufacturing Ltd h

Question 1: Pamlico Manufacturing Ltd h

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter7: Variable Costing For Management analysis
Section: Chapter Questions
Problem 3BE: Variable costingsales exceed production The beginning inventory is 52,800 units. All of the units...
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Question 1: Pamlico Manufacturing Ltd has the following information given in the table below. Sales per unit Variable production cost per unit 12.50 7.50 Variable administration sales and distribution per 1.00 unit Fixed production costs 37 500 Fixed administration sales and distribution 18 750 Opening inventory in units Units produced 2 500 25 000 At the beginning of December 2018, there were 2 500 units in inventory. Required: Draw up a statement of comprehensive income according to marginal costing principles for three different levels of sales, for the month of December a) 12 500 units b) 18 750 units c) 25 000 units Question 2 Using the above information on Pamlico Manufacturing Ltd, prepare the statement of comprehensive income using absorption costing principles for the month of December and assume the following: 1. Normal level of activity is 25 000 shirts per month. 2. Fixed production costs were 37 500 for the month.
Transcribed Image Text:Question 1: Pamlico Manufacturing Ltd has the following information given in the table below. Sales per unit Variable production cost per unit 12.50 7.50 Variable administration sales and distribution per 1.00 unit Fixed production costs 37 500 Fixed administration sales and distribution 18 750 Opening inventory in units Units produced 2 500 25 000 At the beginning of December 2018, there were 2 500 units in inventory. Required: Draw up a statement of comprehensive income according to marginal costing principles for three different levels of sales, for the month of December a) 12 500 units b) 18 750 units c) 25 000 units Question 2 Using the above information on Pamlico Manufacturing Ltd, prepare the statement of comprehensive income using absorption costing principles for the month of December and assume the following: 1. Normal level of activity is 25 000 shirts per month. 2. Fixed production costs were 37 500 for the month.
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