One of the products that are manufactured by Chung Sisters Ltd is ZP11. The company has a budgeted capacity of 6,000 units per month and monthly fixed production expenses relating to this product are estimated at $360,000. At the start of January 2020 the company had in store 400 units of the product. During January 2020 the company produced 5,400 units of the product and sold 5,500 units. Administrative and selling expenses for the month of January 2020 were estimated at $500,000 and $250,000 respectively. The following information was also taken from the companys records for the month of January 2020:

Cost per unit

Details	$
Direct materials	200
Direct labour	250
Variable overheads	100
	550
Selling price per unit	$1,200

Required:

1. Closing stock in units for January 2020. (2 marks)
2. The marginal cost per unit. (1 mark)
3. The full cost per unit. (2 marks)
4. Contribution margin per unit. (1 marks)
5. Prepare the income statement using the marginal costing approach for January 2020. (11 marks)
6. Prepare the income statement using the absorption costing approach for January 2015. (13 marks)
7. Reconcile the difference in profit obtained under both costing methods. (2 marks)