Question 2 Tom and Jerry Ltd manufactures and sells video cameras. The unit sell

Question 2 Tom and
Jerry Ltd manufactures and sells video cameras. The unit selling price and
production costs are as follows:
RsSelling
price
800Direct
materials 100Direct
labour 90Variable
production overheads 50Fixed
production overheads 160The fixed
production overheads assume a monthly production of 2000 units.The
following monthly costs are also incurred:Fixed
administrative overheads Rs80
000Variable
sales overheads 10% of
sales valueFixed
sales overheads Rs120
000During the
month of September 2010 a total of 2400 units were produced of which1800 were
sold. There was no stock on hand at the beginning of September.REQUIRED(a)Prepare
profit statements for September 2010 using(i)
Absorption costing [6
Marks]
(ii)
Marginal costing
[6 Marks]
(b)Prepare
a statement to reconcile the profit under absorption costing and profit under
marginal costing. [3
Marks]
[Total Marks 15]