Question on Marginal and Absorption Costing Technicques

Ā 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 literĀ N50
  • Direct material per literĀ N20
  • Direct labor per literĀ N15
  • Variable production overhead per literĀ N5
  • Fixed production overhead costĀ N600,000
  • Other fixed costsĀ N100,000
  • Sales commission per literĀ N3
  • Quantity soldĀ 180,000 liters
  • Closing stockĀ 80,000

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

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