problem: The given information is available from the books of X Limited for the year ended 31.3.2008.
a) Sales Rs. 1,00,000 (5,000 units)
b) Direct Material Rs. 50,000
c) Direct wages Rs. 25,000
d) Normal production level 6,000 units and there was no opening and closing stock of finished goods.
e) Actual factory expenses Rs. 15,000 (60% are fixed)
f) Actual selling expenses Rs. 3,000 (40% are fixed)
g) Interest and dividends received Rs. 1,500
h) Actual Administrative expenses Rs. 4,500 (completely fixed)
1) Profit as per financial books.
2) Make a cost sheet and compute the profit under cost accounts supposing indirect expenditures are absorbed on the basis of the normal production capacity.
3) Reconciliation statement.