Question 1 EziChairs (M) Son Bhd commenced business on 1 January 2020. It manufactures a special type of chair designed to alleviate back pain. Information on the first year's trading is as follows: Number of chairs manufactured (unit) 5,000 Number of chairs sold (unit) 4,500 Selling price per unit RM 110 Direct materials RM 30 Direct labour RM 40 Fixed production overheads RM 100,000 Required (a) The directors ask for your help in producing statements of profit or loss using the marginal costing and absorption costing method. They say that they will use "the one that gives the higher profit" to show to the company's bank manager. (10 marks) (b) Write a note to the directors explaining the reason for the different profit figures and commenting on their statement. (10 marks) (c) As an Accountant, you also need to prepare brief report to differentiate between these two costing methods in terms of it usefulness and limitations. (5 marks) [Total : 25 marks]