Question 4 Mr. Simon provides you with the following information regarding the unit cost of a single product: The factory overhead is a semi-variable cost. The fixed overhead calculation is based on a budgeted level of activity of 150,000 units and budgeted fixed factory overheads of RM150,000 for each quarter. The budgeted selling and administration overheads are RM80,000 per quarter (all fixed). The selling price for the product is RM10 per unit. The production and sales for each quarter are as follow: There was no opening stock in Quarter 1. Assume that actual costs were identical to estimated costs. Required: a) Prepare an Income Statement for both quarters based on: (i) absorption costing principle; (10 Marks) (ii) variable costing principle. (11 Marks) b) Prepare a statement reconciling the profits for each quarter as calculated in (a) above. (4 Marks) Question 4 Mr. Simon provides you with the following information regarding the unit cost of a single product: The factory overhead is a semi-variable cost. The fixed overhead calculation is based on a budgeted level of activity of 150,000 units and budgeted fixed factory overheads of RM150,000 for each quarter. The budgeted selling and administration overheads are RM80,000 per quarter (all fixed). The selling price for the product is RM10 per unit. The production and sales for each quarter are as follow: There was no opening stock in Quarter 1. Assume that actual costs were identical to estimated costs. Required: a) Prepare an Income Statement for both quarters based on: (i) absorption costing principle; (10 Marks) (ii) variable costing principle. (11 Marks) b) Prepare a statement reconciling the profits for each quarter as calculated in (a) above. (4 Marks)