QUESTION 5: (20 marks)

Prince Rupert fish company buys and sells fishes. The following is the report for Prince Rupert fish company. Diseased fish must be thrown away before it is sold

	June	July
Beginning inventory	0	2,200
Fishes caught	5000	3000
Diseased fishes	1200	700
Sold	1600	3,900
Variable cost
Processing cost per fish	6	6.5
Marketing cost per fish	2	1.9
Fixed Costs
Administrative cost	20,000	16,000

The selling price per fish is $ 35. Prepare the followings.

1. Statement of comprehensive income for June and July under variable costing and absorption costing.
2. Show the reconciliation between variable costing and absorption costing.
3. Why is there a difference in the cost between the variable costing and absorption costing?