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Komuga Sdn Bhd specializes in producing Burned Japanese Cotton Cheesecake

Accounting

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Komuga Sdn Bhd specializes in producing Burned Japanese Cotton Cheesecake. The following information relates to the variable production cost of making a unit of the cake: RM

Direct material RM 35

Direct labour RM 30

Variable production overhead RM 10

Additional information:

i. Fixed production overhead is absorbed based on number of cakes produced. It is estimated that 70,000 units of cakes will be produced in a year and budgeted fixed production overhead is RM 210,000 per annum

ii. Fixed administration overhead is RM 58,000 per year and variable selling overhead is RM 8.50 per unit cake sold

iii. Each unit of cake could be sold at selling price of RM 105.

iv. The number of unsold cakes at the end of May 2019 is 230 units. During June 2019, the number of cakes produced and sold were 6,000 units and 6,000 units respectively.

v. The actual fixed production overhead and fixed administration overhead are assumed same as budgeted.

Required: a. Prepare the income statement for the month of June 2019 using Marginal Costing Method and Absorption Costing Method.