Fixed cost: Fixed Manufacturing overhead Rs 40,000 Fixed selling & Administrative Rs 60,000 Selling Price per unit Rs 100 Variable cost per unit: Direct Materials Rs 30 Direct labor Rs 10 Variable Manufacturing overhead Rs 5 Variable selling & Administrative Rs 2 Units In beginning Inventory 0 Units Produced 2000 Units sold 1900

Required:

a. Compute the unit product cost under both absorption and variable costing.(2 Marks) b. Prepare an income statement for the year using absorption costing.( 3 Marks) c. Prepare a contribution format income statement for the year using variable costing.(3 Marks) d.Prepare a report reconciling the difference in net operating income between absorption and variable costing for the year. (2 Marks)