Mkhulu Company, which is manufacturing only one product, has provided the following data concerning its most recent month of operations:

Selling price R129

Units in beginning inventory 0

Units produced 3 700

Units sold 3 600

Units in ending Inventory 100

Variable costs per unit:

Direct material R37

Direct labour 38

Variable manufacturing overheads 6

Variable selling and Administrative 5

Fixed Costs:

Fixed Manufacturing overhead R103 600

Fixed selling and administrative 50 400

Required

1. What is the unit product cost for the month under variable costing?

2. What is the unit product cost for the month under absorption costing?

3. Prepare an income statement for the month using the contribution margin format and the variable costing method.

4. Prepare an income statement for the month using the absorption costing method.

5. Reconcile the variable costing and absorption costing net operating income for the month.