Answer to Question #285721 in Accounting for missrhoo

Question

The data given below relate to Frempomaa Ltd. for the year ended 31/12/2000:

Fixed factory overhead cost was GHC160,000

Production units 1,000 units

Sales 800 units at GHC500

Administration cost was GHC40,000

Variable selling and distribution overheads GHC80

Direct labour GHC70 per unit

Direct material GHC50 per unit

Prepare the profit and loss account using each of the following cost techniques:

(a) Marginal Costing

(b) Absorption Costing

Answer 1

(a) Marginal Costing

(b) Absorption Costing