BusySolve has hit the market with the next solution to soap scum removal for shower cleaning and anticipate that sales will jump significantly once the influencer they have hired releases their endorsement social media videos. Management wants to make sure they will be profitable as soon as possible and have gathered the following info:

Manufacturing costs per bottle:

Selling costs :

Variable selling costs

Fixed selling costs

Fixed manufacturing costs:

Fixed administrative costs

$\backslash$table$[[$$$,500,000],[100,000,]]$

Because they are just starting to produce this product they have no beginning inventory.

Their next month plans are as follows

Required:

Compute the unit product cost under

$9$ marks

a Absorption cost

b Variable cost

Prepare the income statements for the month under the methoc

$16$ marks

a Absorption cost

b Variable cost

Provide a reconciliation and explain why there is a difference

$5$ marks between the methods