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The following is the cost information of a product variable manufacturing cost rupees 4 per unit fix manufacturing course rupees per year the normal capacities set at 2 lakh units there are no work in progress inventories last year the firm produce to left 10000 unit and Soul 90% at a price of rupees 7 per unit in the current year the sperm produce lakh 10000 units and sold 200000 15000 unit at the same price prepare income statement for both the he is based on absorption costing and variable costing?
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The following is the cost information of a product variable manufactur...
Income Statement for Last Year (Absorption and Variable Costing)
- Units Produced: 210,000
- Units Sold: 200,000
- Selling Price: ₹7 per unit
- Variable Manufacturing Cost: ₹4 per unit
- Fixed Manufacturing Costs: Assume ₹8,00,000 (calculated based on normal capacity)
1. Absorption Costing
- Sales Revenue:
- 200,000 units x ₹7 = ₹14,00,000
- Cost of Goods Sold (COGS):
- Variable Cost: 200,000 units x ₹4 = ₹8,00,000
- Fixed Cost Allocation: ₹8,00,000 (entire fixed cost allocated to produced units)
- Total COGS: ₹8,00,000 + ₹8,00,000 = ₹16,00,000
- Gross Profit:
- Sales Revenue - COGS = ₹14,00,000 - ₹16,00,000 = -₹2,00,000
- Net Income:
- Gross Profit - Operating Expenses (assumed as ₹2,00,000) = -₹2,00,000 - ₹2,00,000 = -₹4,00,000
2. Variable Costing
- Sales Revenue:
- As calculated above: ₹14,00,000
- Variable COGS:
- 200,000 units x ₹4 = ₹8,00,000
- Contribution Margin:
- Sales Revenue - Variable COGS = ₹14,00,000 - ₹8,00,000 = ₹6,00,000
- Net Income:
- Contribution Margin - Fixed Costs = ₹6,00,000 - ₹8,00,000 = -₹2,00,000
Income Statement for Current Year (Absorption and Variable Costing)
- Units Produced: 210,000
- Units Sold: 215,000
- Selling Price: ₹7 per unit
1. Absorption Costing
- Sales Revenue:
- 215,000 units x ₹7 = ₹15,05,000
- COGS:
- Variable Cost: 215,000 units x ₹4 = ₹8,60,000
- Fixed Cost: ₹8,00,000
- Total COGS: ₹8,60,000 + ₹8,00,000 = ₹16,60,000
- Gross Profit:
- ₹15,05,000 - ₹16,60,000 = -₹1,55,000
- Net Income:
- -₹1,55,000 - ₹2,00,000 = -₹3,55,000
2. Variable Costing
- Sales Revenue:
- ₹15,05,000
- Variable COGS:
- ₹8,60,000
- Contribution Margin:
- ₹15,05,000 - ₹8,60,000 = ₹6,45,000
- Net Income:
- ₹6
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The following is the cost information of a product variable manufacturing cost rupees 4 per unit fix manufacturing course rupees per year the normal capacities set at 2 lakh units there are no work in progress inventories last year the firm produce to left 10000 unit and Soul 90% at a price of rupees 7 per unit in the current year the sperm produce lakh 10000 units and sold 200000 15000 unit at the same price prepare income statement for both the he is based on absorption costing and variable costing?
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The following is the cost information of a product variable manufacturing cost rupees 4 per unit fix manufacturing course rupees per year the normal capacities set at 2 lakh units there are no work in progress inventories last year the firm produce to left 10000 unit and Soul 90% at a price of rupees 7 per unit in the current year the sperm produce lakh 10000 units and sold 200000 15000 unit at the same price prepare income statement for both the he is based on absorption costing and variable costing? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about The following is the cost information of a product variable manufacturing cost rupees 4 per unit fix manufacturing course rupees per year the normal capacities set at 2 lakh units there are no work in progress inventories last year the firm produce to left 10000 unit and Soul 90% at a price of rupees 7 per unit in the current year the sperm produce lakh 10000 units and sold 200000 15000 unit at the same price prepare income statement for both the he is based on absorption costing and variable costing? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The following is the cost information of a product variable manufacturing cost rupees 4 per unit fix manufacturing course rupees per year the normal capacities set at 2 lakh units there are no work in progress inventories last year the firm produce to left 10000 unit and Soul 90% at a price of rupees 7 per unit in the current year the sperm produce lakh 10000 units and sold 200000 15000 unit at the same price prepare income statement for both the he is based on absorption costing and variable costing?.
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