Question Four Absorption and Marginal Costing (20 marks) The following information was extracted from the accounting records of ZFD Manufacturers for the year ended September 2019: UNITS Inventory at the beginning of the year Nil Production for the year 14 500 Sales for the year (at R60 per unit) 13 000 R Direct Materials cost per unit 15 Direct Labour cost per unit 9 Variable Manufacturing overheads per unit 6 Variable selling and administrative cost per unit 3 Fixed manufacturing overhead cost 174 000 Fixed selling and administrative cost 75 000 The company utilises the first-in-first-out method of inventory valuation.

Required:

4.1 Prepare the Income Statement using the Marginal Costing method. (11 marks)

4.2 Prepare the Income Statement using the Absorption Costing method. (9 marks)