Below is the manufacturing income stalement for Mac Sdn Bbd Selling price per un

Question

Below is the manufacturing income stalement for Mac Sdn Bbd Selling price per unit Variable production costs per unit Direct material Direct labor Variable overhead $2,000 $600 225 Variable selling expemse per unit Contribution margin per unit 900 40 1060 Fixed manufacturing overhead per year Fixed selling expense Fixed administrative expense $1,200,00 $100,00 $500000 Note 1. During the year the quantity Produced is 5000unit and Quantity sold is 5000. 2. Unit produced is 6000 and Unit sold is 4800. Use Absorption and Marginal cost approach to draw up the income statement for Mac Sdn Bhd.

Explanation / Answer

Particulars Absorption cost approach Absorption cost approach Production - 5000 units Production - 6000 units Sale - 5000 units Sale - 4800 units Gross sales ($2000 per unit) $                      10,000,000.00 $               9,600,000.00 Less: Cost of goods sold ($900 per unit) $                        4,500,000.00 $               5,400,000.00 Gross margin (A) $                        5,500,000.00 $               4,200,000.00 Less:- Variable selling expense ($40 per unit) $                            200,000.00 $                   192,000.00 Fixed mfg overhead (B) $                        1,200,000.00 $               1,200,000.00 Fixed selling exp (C) $                            100,000.00 $                   100,000.00 Fixed admin exp (D) $                            500,000.00 $                   500,000.00 Net Income (E = A-B-C-D) $                        3,500,000.00 $               2,208,000.00 Particulars Marginal cost approach Marginal cost approach Production - 5000 units Production - 6000 units Sale - 5000 units Sale - 4800 units Gross sales ($2000 per unit) $                      10,000,000.00 $               9,600,000.00 Less: Variable expenses -- production cost ($900 per unit) $                        4,500,000.00 $               5,400,000.00 -- selling cost ($40 per unit) $                            200,000.00 $                   192,000.00 Contribution (A) $                        5,300,000.00 $               4,008,000.00 Less: fixed costs Fixed mfg overhead (B) $                        1,200,000.00 $               1,200,000.00 Fixed selling exp (C) $                            100,000.00 $                   100,000.00 Fixed admin exp (D) $                            500,000.00 $                   500,000.00 Net Income (E = A-B-C-D) $                        3,500,000.00 $               2,208,000.00

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