Mike Ltd began operations on 1 January, and achieved the following results for the year:

-Sales: 24000 units

- Selling price : $30 per unit

Manufacturing costs:

-Direct materials :$8 per unit

-Direct labour: $4 per unit

-Variable overhead: $6 per unit

-Fixed manufacturing overhead: $200,000

Selling and administrative costs:

-Variable: $2 per unit sold

-Fixed:$20,000

-Production: 25000 units

Required:

a)make an absorption costing income statement for Mike Ltd.

b)make a variable costing contribution margin statement for Mike Ltd.

c) Reconcile the differences between the profits under the two statements by using the short-cut method.