mct

Question on Marginal and Absorption Costing Technicques

 Questions on Marginal Costing Techniques

Your name Nig. Ltd presents you with the following data about its operations for the quarter ended 31/12/2015

  • Selling price per liter N50
  • Direct material per liter N20
  • Direct labor per liter N15
  • Variable production overhead per liter N5
  • Fixed production overhead cost N600,000
  • Other fixed costs N100,000
  • Sales commission per liter N3
  • Quantity sold 180,000 liters
  • Closing stock 80,000

You are required to prepare an income statement for the quarter ended 31/12/2015 using:

  1. Absorption Costing Technique.
  2. Marginal Costing Technique.
  3. Show reconciliation of profit between the two methods.

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