Name: Neelandra Goswami

Roll No.: 92066

Email : neelandra.goswami@gmail.com
Mobile : 09811846756

Dear Sir,

The solution to Assigment 2 is as is done below. The answers given by you were :
Absorbtion costing - Income : 3,50,000
Marginal Costing – Income : 2,30,000

Please help me to understand what I have done wrong in the following solutions.

Absorbtion Costing
1,200,00
Sales Revenue SR 300 x 4000 0
       
Direct material A   200,000
Direct labour B   100,000
Prime Cost C=A+B   300,000
Factory Overhead Fixed D   100,000
Factory Overhead Variable E   600,000
1,000,00
Cost of Production F=C+D+E   0
       
Inventory      
Opening No of Shirts G   500
Production no of Shirts H   5,000
Total Shirts I=G+H   5,500
Sales J   4,000
Closing no. of Shirts K=I-J   1,500
Price per shirt L=F/H   200
       
Opening Stock M 100000 + (80x50) 104,000
Closing Stock N=K x L   300,000
       
Cost of Goods sold O=F+M-N   804,000
       
Selling expence Fixed P   20,000
Selling Expence Variable Q   30,000
       
Cost of Sale R=O+P+Q   854,000
       
Gross Margin (Gross) S=SR-R   346,000
Capasity of Varience T   0
Gross Margin (Net) U=S-T   346,000

Marginal Costing
Sales Revenue SR 300 x 4000 1,200,000
       
Factory Overhead Variable A   600,000
Cost of Production B=A   600,000
       
Inventory      
Opening No of Shirts C   500
Production no of Shirts D   5,000
Total Shirts E=C+D   5,500
Sales F   4,000
Closing no. of Shirts G=E-F   1,500
Price per shirt H=B/D   120
       
Opening Stock I 100000 + (80x50) 104,000
Closing Stock J=G*H   180,000
       
Cost of Goods sold K=B+I-J   524,000
       
Contribution (Gross) L=SR-K   676,000
       
Selling Expence Variable M   30,000
       
Cotribution (Final) N=L-M   646,000
       
Direct material O   200,000
Direct labour P   100,000
Prime Cost Q=O+P   300,000
Factory Overhead Fixed R   100,000
Fixed Cost Manufacturing S=Q+R   400,000
       
Income R=O+Q   246,000