Q1) XYZ co. began its operations on jan. 1,1994.

Following are the details for 1994 and 1995

1994 1995
Standard production 100,000 150,000
Actual production 100,000 150,000
Actual sales 80,000 140,000
Cost for 1994 and 1995

Variable cost Fixed cost

Direct material $ 1.5 -
Direct labor $2 -
Factory overhead $ 1.0 100,000
Selling overgeads $ 0.5 160,000
Required: calculate net profit by;

1- absorption costing

2- marginal costing

Q2) accounting firm of smith n co. was asked to determine the value of ots inventory. In the month of
july, the co. made 90,000 suits. It was a warm month so sales increased 20% from june. June sales were
50,000. Costs per units for the 90,000 suits were:

Direct material $4
Direct labor $2
Variable factory overhead $1
Fixed factory overhead $ 1.5
Ending inventory was 30,000 units. Firm was direct costing to value ending inventory.

Required: calculate net profit by; marginal costing

Q3) units produced 50,000 units of which 15000 units were not sold.

Direct material : $250,000

Direct labor : $285,000
Factory overhead:
Variable : $ 175,000
Fixed : $ 85,000
Required: calculate value of 15000 units using;

1- absorption costing

2- marginal costing

Q4) the C.M.S corporation sells review books to accounting students. The variable costs to produce each
book are as follows:

Direct material $2
Direct labor $1
Variable overhead $1
 Total $4

Fixed factory overhead is $12000 per year. Fixed selling expenses are $ 6000 per year. Selling price per
book is $ 5. Actual data relating to inventory and sales are as follows:

Quantity May June July

Inventory(beginning) 0 1000 3000
Books sold 5000 4000 2000
Book produced 4000 2000 1000
Inventory(closing) 1000 3000 4000
Find the net profit for each month usin marginal costing.