ABC Ltd is a company engaged in the manufacturing and selling of metal cans .The following data provided below relate to ABC Ltd for the months October and November 2021.

Selling price 60

Direct Material Cost 25

Direct wages 5

Variable production Overhead 3

Other cost per month

Fixed Production Overhead 88,000

Fixed selling Overhead 18,000

Fixed Administrative Overhead 27,000

Oct-21 Nov-21

Units Units

Sales. 10,000 12,000

Production 12,000 10,000

Variable Selling Overhead: 10% of sales value

Normal Capacity was 11,000 units per month

You are required to prepare the profit statements for the month of October and November 21

(a) Using marginal costing method . (7 marks)

(b) Using absorption costing method . (7 marks)

(c) Calculate the Over/under absorption of fixed cost production overhead .(5 marks)

(d) Briefly explain why the profit per month varied under marginal and absorption costing method. (6 marks)