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Questions 25 The Chairman of Ideal Pte Ltd was provided the following Income Statement for the year ending 30 April 2011. He approached you one day for advice because of the limited predictive value of the statement below amidst changing sales volumes. Revenue (80,000 units) 1,200 Beg ...g ___ Cost of goods manufactured Cost of goods sold [before adjustment] oo! c! Gross prot mlml |c=| 0. b.) O Fixed production overheads were $7 per unit of nished product. Fixed overheads applied amounted to $700,000. Non production overheads include variable costs of $60,000 and xed costs of $270,000. All over or under-applied overhead costs are charged to the Cost of Goods Sold. Reg uired i) In response to the Chairman, restate the Income Statement using the variable costing approach. (5 marks) ii) Reconcile and explain the difference between the prots in (i) above i.e. the variable costing Income Statement and that in the absorption costing Income Statement. (2 marks)