b Absorption-costing profit statements Year 1 Year 2 Sales 1,000 units Sales 1,200 units Production 1,400 units Production 1,000 units Profit (€3 per unit) Cost of goods sold Opening stock Variable manufacturing costs Fixed manufacturing costsa Cost of goods available for sale Closing stockb €0 700 700 1,400 400 €3,000 €400 500 700 1,600 240 €3,600 Cost of goods sold Gross margin Marketing and administrative costs Variable marketing and admin. costs Fixed marketing and admin. costs Marketing and admin. costs Operating profit 1,000 400 1,000 2,000 1,400 €600 1,200 400 1,360 2,240 1,600 €640 a Fixed manufacturing costs Year 1: €700 ÷ 1,400 = €0.50 per unit Year 2: €700 ÷ 1,000 = €0.70 per unit b Unit stockable costs Year 1: €1,400 ÷ 1,400 = €1.00 per unit Year 2: €1,200 ÷ 1,000 = €1.20 per unit
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