Answer Happy

Question 4 Pendrill makes car bumpers. The following information is obtained from January's budget and is based on a production volume of 6,000 car bumpers Opening stock of car bumpers Fixed manufacturing overhead Variable manufacturing overhead Selling and administrative expenses (all fixed) Direct labour Direct material used Selling price (unit) $ 0 72,000 18,000 25,000 120,000 90,000 64 The actual production and sales volumes for the first 3 months of the year were as follows: March Quarter Number of car January bumpers: Production level 6,000 Sales 4,000 February 5,000 6,000 7,000 7.000 18.000 17,000 Actual variable costs per unit and total fixed overheads incurred were exactly as forecast Required: Calculate the profit for each month and for the quarter (1) Using absorption costing (ii) Using marginal costing