LO1: Understanding of Management Accounting Systems

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COSTING SHEET TO BE USED FOR LEARNING OUTCOME CRITERIA LO 2; P3
Using the information below create two income statements, one to be prepared under a Marginal/Variable Costing method, and the second to be prepared under an Absorption Costing method
This covers periods 1 to 6 of the Clear Blue Waters Company
Unit Selling Price = £11
Unit Variable Cost = £5
Fixed Costs for each period = £330,000
The company produces only 1 product
Budgeted activity is expected to average 150,000 units per period.
Production and sales for each period are as follows:
Units Sold (000’s) Period 1 = 160, Period 2 = 130, Period 3 = 190, Period 4 = 160, Period 5 = 150, Period 6 = 170
Units Produced (000’s) Period 1 = 160, Period 2 = 160, Period 3 =160, Period 4 = 160, Period 5 = 180, Period 6 = 150
There were no opening inventories at the start of Period 1
Actual manufacturing fixed overhead incurred was £310,000 per Period
Non-manufacturing overheads were £110,000 per period.