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We have the following questions of which my friend and I are getting different answers in regards to the profit earned under the two techniques. Can you please help and please show all the working and steps involved. Please show the income statements under both techniques.
The following data relate to XYZ company which makes and sells computers.
Production 1,00,000 units
Sales 80,000 units
Selling price/unit Rs.15
Direct materials Rs. 2,50,000
Direct labour Rs. 3,00,000
Factory overheads:
Variable Rs. 1,00,000
Fixed Rs. 2,50,000
Selling and Distribution overheads:
Variable Rs. 1,00,000
Fixed Rs. 2,00,000You are required to present income statements using (a) absorption costing and (b) marginal costing. Find the profit earned in using the two different techniques.
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