Model: Control accounts for different overheads
The following is a summary of the trading and profit and loss account of ‘X’ Ltd for the year ended 31 December 2009:
The company manufactures a standard unit.
In the cost accounts, production overhead has been absorbed by production at 20% of prime cost, administration overhead Rs. 1.50 per unit and selling and distribution overhead at Rs. 2.00 per unit. The net profit shown by the cost accounts is Rs. 66,000.
You are required to prepare:
- Control accounts for production overhead, administration overhead and selling and distribution overhead
- A statement reconciling the profit disclosed by the cost records with that shown in the financial accounts