Yogurt Soya Milk Selling price RM4.50 RM5.50 Sales (packs) 190,000 80,000 Direct labour hour 80,000 50,000 Manufacturing cost: RM RM Direct material…

QUESTION 1

Seehat Sdn. Bhd. involves in the operation of making yogurt and soya milk in Bandar Kayangan. Throughout the month of January, the company has made a total of 200,000 packs of yogurt and 100,000 packs of soya milk. Its fixed overhead is absorbed to the products based on direct labour hour. The following is information on the operation of the company for the month of January 2018:

a)            Discuss how management accounting information is important for managers in Seehat Sdn. Bhd., the manufacturing company.

(4 marks)

b)           Based on the above information, answer the following questions:

i)          calculate product cost per pack for yogurt using absorption and marginal costing methods;

(4 marks)

ii)          calculate product cost per pack for soya milk using absorption and marginal costing methods;

(4 marks)

iii)          prepare Income Statement for Seehat Sdn. Bhd. using absorption costing method;

(5 marks)

iv)          prepare Income Statement for Seehat Sdn. Bhd. using marginal costing method;

(5 marks)

v)          adjust the differences in net income reporting that exist between both income statements; and

(2 marks)

vi)          discuss situations that will result in different net income reporting for both methods.

(3 marks)