Question 4 1. The following information was extracted from the ledgers of Billy Company fo
Question 4
1. The following information was extracted from the ledgers of Billy Company for its products for the year ended 31 December 2002:
$
Sales (100,000 units) 500,000
Direct materials 100,000
Direct wages 70,000
Fixed production overheads 110,000
Variable production overheads 20,000
Administration expenses (60% fixed, 40% variable) 80,000
Selling expenses (60% fixed, 40% variable) 130,000
Required:
(a)Prepare the Profit and Loss Statement by using Absorption Cost method.
(b)Prepare the Profit and Loss Statement by using Marginal Cost method.