The income statement for the year ended 31 March 2020 using the marginal costing method is as follows-
Particulars Amount (R) Amount (R)
Sales (17,200*62) 1,066,400
Less-Variable Cost of goods sold
Beginning inventory
Direct material (19,000*20) 380,000
Direct labour (19,000*12) 228,000
Variable manufacturing (19,000*8) 152,000
Variable selling and administrative (19,000*5) 95,000
Cost of goods sold(manufactired) 855,000
Less- Ending inventory (40*1,800) 72,000
Variable Cost of goods sold 783,000
Contribution 283,400
Less- Fixed overhead
Fixed manufacturing 150,000
Fixed selling and administrative 60,000
Fixed overhead 210,000
Net profit 73,400
Working note-
The ending inventory if 1,800 (19,000-17,200)
The valuation of ending inventory is at a rate of 40 including direct material, direct labour, and variable manufacturing overhead.
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Video Transcript
in the given question, different cost has been given and it is said some parts are variable and some butter face and the cost this is for the sales unit off 30,000. This costs are for 30,000 units. And the first cause that is being said is of direct material. And the total cost indirect material is 300,000 100% is variable parts. So this comes to $300,000. That's total variable costs and no fixed part. The second cost is of direct labor And $250,000. $250,000. 100% is variable. So 200 $50,000. No fixed authorities of manufacturing overhead, manufacturing overhead. The total cost is 200 $50,000 out of which 50% is variable and the other 50% is fixed. So 50% of $250,000 will be 1 25 $1000 Variable part and the other 50% that is 125,000 has fixed part. The last cause that is giving is selling an administration team, It is $150,000 Out of which 24 5% is variable part and other 75% will be fixed part So 25% of $150,000 comes to 37 500 And if 75% will be 112 500. So Total we can calculate the total cost this is 950 $1000 and total variable cost that is 3, 300,000 to 50 1000 won 25,000. This comes to 7 1-5 Double zero. And the the fixed part will be 2375 double digit or so from this we know what is the total variable cost to us Now. We were preparing a statement sewing lee calculation of contribution statement showing calculation of contribution. Now first of all we need since price on value now we don't know what is the sales price exactly. So the total sales will let assume is to be X. This figured out in dollars and if we substack variable costs from it we are going to have our contribution so really it will cost total variable costs. We have calculated This is $712 $50 five double 0. So this comes to contribution. So total contribution will be how much sales minus variable cost, that is x minus 7125 double zero. This is the contribution for us. Now in the question it is given that this contribution margin is 40%. So we know that contribution margin formula is what it is. Total contribution on sales in 200 And the contribution margin is 40% or we can say 0.4 and we have calculated the contribution to be X 7125 double zero. Mhm. So we have converted into decimals so we don't need this 100 parts. So the sales is X. So this comes to 0.4 x minus x minus 7125 double zero. And if you further solve this we will be having 0.6 x minus two equals two minus 7125 double zero. So solving this further we will be getting X to be 1187 five double $0. So this is the sales value for 30,000 units. So sales value but 1000 units comes to 1187 500 dollars. And in order to have selling price per unit, what we will be doing we will be dividing these sales value one Number of units. So this one double 1875 double zero dollars. This is the sales value for 30,000 units. And if you further solve this then we are going to get $39.58. So selling price per unit comes to 39 $.58. Thank you.