- Question 1 25 Marks Rother Co Manufactures A Single Product The Bark Details Of Which Are As Follows Per Unit R Selli 1 (72.78 KiB) Viewed 63 times
QUESTION 1 25 MARKS Rother Co manufactures a single product, the Bark, details of which are as follows. Per unit R Selling price 180.00 Direct materials 40.00 Direct labour 16.00 Variable overheads 10.00 Annual fixed production overheads are budgeted to be R1.6 million and Rother Co expects to produce 1,280,000 units of the Bark each year. Overheads are absorbed on a per unit basis. Actual overheads are R1.6 million for the year. Budgeted fixed selling costs are R320, 000 per quarter. Actual sales and production units for the first quarter of 2022 are given below. January - March 240,000 Sales Production 280,000 There is no opening inventory at the beginning of January. Required: Prepare income statements for the quarter, using a) Absorption costing b) Marginal costing c) Reconcile the profits calculated in a) and b) above 10 10 5 Marks