Bush Tea Brands manufactures and sells two products Bissy tea tea and Cerasee tea. It had budgeted to produce 18,000 units each for both Bissy tea and Cerasee tea. The following costs were incurred during 2015, the companys first year of operations.

Variable Cost per unit

Details	BB120 $	OZ650 $
Direct materials	6	16
Direct labour	9	11
Variable overheads	8	6
Total	23	33
Fixed production overhead	360,000	360,000

Fixed selling and administrative overheads for the company was $100,000.

During 2015, the company produced 13,000 units for Bissy tea and 15,000 units for Cerasee tea. The company sold 10,000 units for Bissy tea and 12,000 units for Cerasee tea. The selling price of the companys product is $100 per unit for both products.

Required for both products:

a) Compute the ending inventory for the year. (3 marks)

b) Calculate the full cost per unit of production. (5 marks)

c) Prepare profit statement for the month using Marginal Costing. (12 marks)

d) Prepare profit statement for the month using Absorption Costing. (14 marks)

e) Prepare a reconciliation of the profits using the above costing methods (6 marks)