A company started its business in 2005. The following information was available for January to March 2005 for the company that produced A single product:

Shs Selling price per unit 100 Direct materials per unit 20 Direct Labour per unit 10 Fixed factory overhead per month 30000 Variable factory overhead per unit 5 Fixed selling overheads 1000 Variable selling overheads per unit 4 Budgeted activity was expected to be 1000 units each month Production and sales for each month were as follows:

Jan Feb March Unit sold 1000 800 1100 Unit produced 1000 1300. 900

Required:

Explain absorption and marginal costing statements for the three months. Show all your workings.