Question

Question 2
In the coming year, Power Company expects to sell 70,000 units of product X at RM13 each. Power Controller provided the following for the coming year.

Units of production 110,000
Direct material per unit RM4.50
Direct labour per unit RM3.00
Variable overhead per unit RM1.50
Variable selling expenses per unit RM1.10
Total fixed overhead RM132,000
Total fixed selling expenses RM30,000
Total fixed administrative expenses RM15,000

Required:

a) Calculate the cost of one unit of product X under absorption costing.                     
b) Calculate the cost of one unit of product X under variable costing.                       
c) Calculate Power’s net year operating income under absorption costing.              
d) Calculate Power’s next year operating income under variable costing.                

Answer 1

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