Intermediate: Preparation of variable and absorption costing statements Solo Limited makes and sells a single product. The following data relate to periods 1 to 4.

Required:

(a) Prepare operating statements for EACH of the periods 1 to 4, based on marginal costing principles. (4 marks)

(b) Prepare operating statements for EACH of the periods 1 to 4, based on absorption costing principles. (6 marks)

(c) Comment briefly on the results obtained in each period AND in total by the two systems.

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Variable cost per unit Selling price per unit Fixed costs per period () 30 55 6000 Normal activity is 500 units and production and sales for the four periods are as follows: Period 1 Period 2 Period 3 Period 4 Sales Production units units units units 500 400 550 450 500 500 450 500 There were no opening stocks at the start of period 1.