A Chinese smartphone maker TECNO Ltd has provided you with a summary of its price and cost information for one of its product segments (tablets). It is based on 2018 income statement.

Units produced

2000 units

Sales

$ 500 per tablet

Direct materials

$ 150 per tablet

Direct labour

$ 75 per tablet

Variable manufacturing overheads

$ 20 per tablet

Fixed manufacturing overheads

$ 110,000 per year

Variable selling and administrative costs

$ 65 per tablet

Fixed selling and administrative costs

$ 116,000 per year

Required;

a)Provide a comparison of unit product cost under absorption costing and marginal costing methods. (08 marks)

Compute Operating income using two methods i.e. Absorption costing and Marginal costing.