REQUIRED

Prepare the Income Statement of Mary's Manufacturers the year ended 31 December 2020 using the:

1.1 Marginal costing method.

1.2 Absorption costing method.

INFORMATION

The following information was extracted from the accounting records of Mary's Manufacturers for the years ended 31 December 2020 and 31 December 2019:

31 December 2020

31 December 2019

Units

R

Units

R

Sales for the year

3 500

?

3 700

666 000

Selling price per unit 200 180

Production for the year

4 100

4 000

Finished goods at beginning of year

?

Nil

Variable manufacturing costs per unit

50

45

Variable selling and administrative costs per unit

25

24

Fixed manufacturing costs per year

45 100

36 000

Fixed selling and administrative costs per year

24 000

25 000

Additional information

1.

Mary's Manufacturers uses the FIFO method for the valuation of inventory.

2.

The increase in the fixed manufacturing costs is due to a new rental agreement in respect of the factory.