QUESTION 2

ABC Sdn Bhd is producing a product called BB. Below are the cost information provided by Manager of BB production.

Selling price	RM 30.00
Direct material	RM 2.80
Direct labour	RM 8.00
Variable manufacturing overhead	RM 1.20
Variable non-manufacturing overhead	RM 0.80
Fixed production overhead (per production unit)	RM 3.50
Fixed administration and general overhead	RM 12,200
Fixed selling and distribution overhead	RM 4,100
Production	5,000 units
Sales	5,200 units
Closing stock	500 units
Opening stock	700 units

Required:

A) Prepare the Income Statement of ABC Enterprise for the second half year 2020 using Marginal Costing.

B) Prepare the Income Statement of ABC Enterprise for the second half year 2020 using Absorption Costing.

C) Prepare the reconciliation for the difference in the profits under the two costing approaches.