LS2469: The following data relates to XYZ Ltd., which produces and sells ratios:

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Question: The following data relates to XYZ Ltd., which produces and sells ratios:

Opening Stock 5,000 sets valued at Rs.10,00,000 (including Variable Cost of Rs.80 per set)

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Closing stock is valued at current cost.

(i)Prepare income statement using:

(a)Absorption Costing

(b)Marginal Costing

(ii)Explain the reason for the difference in profit under the two systems

 


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