From the following data compute the profit under a] Marginal costing and b] Absorption costing and reconcile the difference in profits.
|
Selling price per unit: |
Rs.8 |
|
Variable cost per unit: |
Rs.4 |
|
Fixed cost per unit: |
Rs.2 |
Normal volume of production is 26 000 units per quarter.
The opening and closing stocks consisting of both finished goods and equivalent units of work in progress are as follows:
|
Particulars |
Quarter I |
Quarter II |
Quarter III |
Quarter IV |
Total |
|
Opening stock [Units] |
— |
— |
6,000 |
2,000 |
— |
|
Production [Units] |
26, 000 |
30, 000 |
24, 000 |
30, 000 |
1, 10,000 |
|
Sales [Units] |
26, 000 |
24, 000 |
28, 000 |
32, 000 |
1, 10,000 |
|
Closing stock [Units] |
— |
6, 000 |
2, 000 |
— |
— |