At the end of $2021,$ Bailey$$s Medical Supplies had $3,000$ wheelchairs in stock. It intended to manufacture $10,000$ wheelchairs for $2022$ at a selling price of $$1,900$ each.

Fixed production, administration and selling expenses were expected to be $$950,000,$ $$300,000$ and $$700,000$ respectively.

During the year, they actually manufactured $5,000$ wheelchairs. On December $31,2022,4,500$ wheelchairs were left in stock.

The following cost information relating to the product was made available at the end of December $2022$:

Cost per unit

Details

$

Direct material

$200$

Direct labour

$100$

Variable production overheads

$50$

Cost per unit

$350$

Required:

$($a$)$ What was the contribution per unit of production for the year? $(3$ marks$)$

$($b$)$ How many wheelchairs were sold for the year? $(5$ marks$)$

$($c$)$ Prepare an income statement for the year using marginal costing. $(12$ marks$)$

$($d$)$ Prepare an income statement for the year using absorption costing. $(14$ marks$)$

$($e$)$ Reconcile the profits obtained from the costing approaches.