Business, 29.10.2021 01:50 andyyandere8765

Starbex Ltd. manufactures a single product for which the following data based on a budgeted capacity of 196,000 units per month, are as follows: Stock, output and sales data (in units)

Details January

Sales 160,000

Opening stock 30,000

Closing stock 80,000

Production 210,000

Cost Data

Details $

Direct materials 50

Direct labour 25

Variable Production Overheads 43

Fixed administrative and selling overheads were estimated at $300,000 and $420,000 respectively. During the periods, the company sold one unit of its product for $180 and Total Fixed Production Overheads were $2,940,000.

Required:

(a) Determine the full cost per unit. (3 marks)

(b) What is the marginal cost per unit? (2 marks)

(c) Show the profit situation using Marginal costing principles. (7 marks)

(d) Show the profit situation using Absorption costing principles. (8 marks)

Answers: 1

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Starbex Ltd. manufactures a single product for which the following data based on a budgeted capacity...

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