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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