Rizqi Sdn Bhd just started manufacturing and selling a new product in year 2021. The selling price of the product is RM85 per unit. The data below relates to the product for the month of February 2021.

Opening inventory Sales	3,000 units 6,000 units
Production	8,000 units
Cost per unit:	RM
Direct materials	16
Direct labour	16
Production overhead cost	20
Variable selling expenses	2

Additional information:

1. The fixed portion of production overhead cost per unit is RM12. This cost is calculated based on normal production units of 8,000 per annum.

2. Monthly fixed production overhead and fixed administrative costs is RM96,000 and RM30,000 respectively.

3. The company currently practices variable costing method to prepare income statements. However, the Cost Accountant of the company suggests changing the method to absorption costing since the approach is recommended for external reporting purposes.

Required:

1. Prepare the income statement for the month of February using the current approach.

2. Prepare the income statement for the month of February using the suggested approach.

3. Prepare a profit reconciliation statement.

Compare and comment on the profit reported by the two approaches.