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July 29, 2018 at 4:29 pm #465147greenapp
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Hi sir ,
I have some questions:
1 a company manufactures and sells a single product.in two consecutive months the following levels of production and sales (in units ocurred:
sales : month1:3800 month2:4400.
production : month1:3900 month2:4200.
the opening inventory for month 1 was 400unitw .profits or losses have been calculated for each month using both absorption and marginal costing principles.
which of the following combinations of profits and losses for the two months is consistent with the above data?.
the answer is :
absorption costing profit /(loss) :month1:200 month2:3200.
marginal costing profit/(loss): month 1:(400) month2:4400.
(closing inventory at the end of month1 =opening inv.+productionsales)can you explain the answer please?
2
an organisation operates a piecework system of remuneration ,but also guarantees its employeea 80% of a time based rate of pay which is based on$20 per hour for an eight hour working day.Three minutes is the standard time allowed per unit of output .Piecework is paid at the rate of18$ per standard hour .If an employee produces 200units ineight hours on a particular day ,what is the employee’s gross pay for that day?
the answer is:
production in one standard hour=20units.
pay for 200units =200/20*18=180$.the production in one standard hour how did we get it?
3a company has recorded the following variances for a period :
sales volume variance $10,000 adverse.
sales price variance $5,000 favourable .
total cost variance $12,000 adverse.
standard profit on actual sales for the period was $120,000.
what was the foxed budget profit for the period?
the answer is $130,000.
120,000+10,000=130,000$why we ignore other two variances ,and why we added 10,000$not subtract (as 10,000 adverse means we budget more sales and then in actual we sell less units, so we adjust the budget profit by subtracting 10,000!!!as we budget more than we sell!!) can you help me to understand this please.
Thank you.

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