Inventory, 1 Jan 2020 Inventory, 31 Dec 2020 5.000 units ? units Production Sales Direct material Direct labor Variable Overhead (55 is related to selling expense) Fixed Cost (80% related to production) 8,000 units 10,000 units $12.00 per unit $15.00 per unit $18.00 per unit 200,000 per annum The product sells for $150.00 per unit. a. Required: Prepare a profit and loss statement for the year ended 31 December 2020 using variable costing system (6 marks) b. Prepare a profit and loss statement for the year ended 31 December 2020 using absorption costing system (7 marks) Prepare the statement of reconciliation of nct profit between absorption costing and variable costing (3 marks) c. Briefly explain on the reason for using absorption costing method as a choice of reporting. (4 marks)