Bailey plc commenced business on 1 March making one product only, the standard cost ofwhich is as follows:Thefixed production overhead figure has been calculated on the basis of a budgeted normaloutput of 36,000 units per annum. The actual fixed production overhead incurred in Marchand April was £15,000 each month.Selling, distribution and administration expenses are: Fixed£10,000 … Continue reading “basis of a budgeted normal output | My Assignment Tutor”

Bailey plc commenced business on 1 March making one product only, the standard cost ofwhich is as follows:Thefixed production overhead figure has been calculated on the basis of a budgeted normaloutput of 36,000 units per annum. The actual fixed production overhead incurred in Marchand April was £15,000 each month.Selling, distribution and administration expenses are: Fixed£10,000 per monthVariable15% of the sales value The selling price per unit is £35 and the numbers of units produced and sold were: March(Units)April(Units)Production2,0003,200Sales1,5003,000 Required: (a)Prepare profit statements for each of the months of March and April using:(i)(ii)absorption costing; andmarginal costing.(b)Present a reconciliation of the profit or loss figures given in your answers to (a). £Direct labour5Direct material8Variable production overhead2Fixed production overhead (Budgeted rate)5___Standard production cost/unit£20___