INFORMATION

The following information relates to the only product made by Fabby Limited for the year ended 31 December 2021:

Opening Inventory 0

Number of units manufactured 99 000

Number of units sold (at R5 940 per unit) 98 000

Direct Materials costs per unit R990 Direct Labour costs per unit R1980

Variable manufacturing overheads cost per unit R980

Variable selling expenses per unit R220

Fixed Manufacturing overhead cost R4 950 000

Fixed selling and administrative expenses R1 980 000

REQUIRED: Draft the income statement for the year ended 31 December 2021 using the:

5.1 Marginal Costing method (10 marks)

5.2 Absorption Costing method (10 marks)