Solution Exhibit 7.21
Theoretical
capacity
Practical
capacity
Normal
utilisation
Profit (€68
× 2,400,000) Cost of goods sold Opening stock Variable manufacturing costs,
€46.30
× 2,600,000 Fixed manufacturing overhead costs,
€7.99, €12, €15
× 2,600,000 Cost of goods available for sale Closing stock,
€54.29, €58.30, €61.30
× 200,000 Total cost of goods sold (at budgeted costs) Adjustment for variances
€163,200,000 0
120,380,000 0,774,000 141,154,000 10,858,000 130,296,000 a
€163,200,000 0
120,380,000 31,200,000 151,580,000 11,660,000 139,920,000 a
€163,200,000 0
120,380,000 39,000,000 159,380,000 12,260,000 147,120,000 a Cost of goods sold Gross margin Other costs Operating profit
150,154,000 13,046,000 0
€13,046,000 149,352,000 13,848,000 0
€13,848,000 148,752,000 14,448,000 0
€14,448,000 a. Seethe answer to requirement 1 for calculation.
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