A Khang Ltd manufactures digital photo albums. The following information is available for the year ending 31 December 2014.

\begin{tabular}{lr}

Opening inventory & zero \\

Production & 60,000 units \\

Sales & 45,000 units \\

Selling price per unit & $£ 18$ \\

Direct labour cost per unit & $£ 3$ \\

Direct material cost per unit & $£ 5$ \\

Variable selling and administration per unit & $£ 2$ \\

Fixed selling and administration costs & $£ 25,000$ \\

Variable manufacturing overhead per unit & $£ 1$ \\

Fixed manufacturing costs & $£ 240,000$

\end{tabular}

\section*{Required:}

(a) Prepare the income statement for Khang Ltd for the year ending 31 December 2014 using:

(i) absorption costing

(ii) marginal costing

(b) Provide a reconciliation of the two profit (or loss) amounts in

(a) above.

(c) Calculate the contribution earned at this level of output and sales.