Exhibit 1: Water Ltd makes a product, the Splash, which has a variable production cost of $45,000 (production, administration, sales and distribution). There were no variable marketing costs. Calculate the contribution and profit for September 19×0, using marginal costing principles, if sales were as follows: a) 10,000 Splashes b) 15,000 Splashes c) 20,000 Splashes Exhibit 2: Water Ltd makes two products, the Loo and the Wash. Information relating to each of these products for April 2018 is as follows: Loo Wash Opening stock Nil Nil Production (nits) 15,000 6,000 Sales (units) 10,000 5,000 $ $ Sales price per unit Unit costs 20 30 Direct costs Direct materials 8 14 Direct labour 4 2 Variable production overhead 2 1 Variable sales overhead 2 3 Fixed costs for the month $ Production costs 40,000 Administration cost 15,000 Sales and distribution costs 25,000 Using marginal costing principles, calculate the profit in April 2018. Use the approach set out in Note (d) to the Water Ltd case, above.
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