Cloud Ltd., produces 8,000 units of product Z during the year ended 31/12/2018. 6,000 of these units were sold at sh6 per unit. The production costs were as follows:
Direct Materialssh0.50 per unit
Direct Labour sh0.80 per unit
Variable Overhead sh0.50 per unit
Fixed Overhead Cost for the year sh3,000
You are required to:
(a) Prepare income statements under Marginal and Absorption costing principles. (12 Marks)
Sample Solution
