• April 26th, 2016


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good answer and it should be right.
ABC Ltd manufacturing a single product , the flowerpot, details of which are follows :
Selling price $90
Direct materials $20
Direct labour $5
Annual fixed production overheads $800000
Annual production of flowerpot 640000 units
Annual fixed selling costs 640000
Actual sales for the period January to march 2016 were 120000 units , and actual production was 140000 units . there was no opening inventory at the beginning of January .
A)prepare detailed income statements for the quarter , using both marginal costing and absorption costing .
B) How would the profits for the two different techniques differ if there were no changes between opening and closing inventory ?

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