Enes Inc. is the main manufacturer of multicolour headbands in Western Jamaica. The following

budgeted data relates to Enes Inc. for two periods: December $31,2022$ and December $31,2023.$

Dec. $2022$ Dec. $2023$

Production $($units$)54,00067,000$

Sales $($units$)62,00073,000$

Opening stock $($units$)30,00022,000$

The company incurred direct material and labour in addition to production and selling overheads

per unit for both years as follows:

Direct material $$300$

Direct labour $$420$

Variable production overheads $$250$

Variable selling and distribution $$220$

The annual fixed production overheads are budgeted to be $$900,000$ and the company expects to

produce $50,000$ headbands each year. Overheads are absorbed on a per unit basis. Actual fixed

production overheads in $2022$ and $2023$ were $$960,000$ and $$1,230,000$ respectively. Actual fixed

administration cost for both years was $$550,000$ per year with the selling price per unit being

$$1,250.$

Required:

$($a$)$ Prepare the marginal costing income statements clearly showing the treatment of stock for

December $31,2022$ and $2023.(12$ marks$)$

$($b$)$ Prepare the absorption costing income statements for December $31,2022$ and $2023.$

$(16$ marks$)$

$($c$)$ Reconcile the income under both statements.