introduction to management accounting

"These statement can't be right," said Dato" Seri Adib, the president of Sentosa Holding. We sold the same number of units this year as we did last year, yet our profits have more than doubled. Who made the goof, the computer or the people who operate it?. Dato' Seri Adib was referring to the following statements (absorption costing basis): Sentosa Holding Statement of Comprehensive Income For The Year 1 and Year 2 Year 1 Year 2 (RM) (RM) Sales (20,000 units each year) 700,000 700,000 Cost of goods sold 460,000 400,000 Gross margin 240,000 300,000 Selling and administrative expenses 200,000 200,000 Net operating income 40,000 100,000 The statements above show the results of the first two years of operation. In the first year, the company produced and sold 20,000 units. In the second year, the company again sold 20,000 units, but it increased production as shown below: Year 1 Year 2 Production in units 20,000 25,000 Sales in units 20,000 20,000 Variable manufacturing cost per unit RM8 RMB produced Variable selling and administrative RM1 RM1 expenses per unit sold Fixed manufacturing overhead costs RM300,000 RM300,000 (total) Sentosa Holding applies fixed manufacturing overhead costs to its only product on the basis of each year's production. Thus, a new fixed manufacturing overhead rate is computed each year. Required : A. Compute the unit product cost for Year 1 and Year 2 under absorption costing. B. Compute the unit product cost for Year 1 and Year 2 under variable costing