Salim trading company is dealing with Bicycle products focuses on the costing methods of marginal and absorption costing and compares the profit made by their business under each method.The use of each system is dependent on the information needs of the business as these costing systems use the same costs, but they are treated differently according to their behaviour.Classification of costs is used in marginal costing to work out how much it costs to produce each extra unit of output whereas absorption costing tells how much it costs to make one unit of output.The following are the details of a manufacturing concern for the year ending 31 December 2019. Production in units 2,200; Sales in units 2,000; There is no opening stock, Variable production cost per unit is OMR 7; Total Fixed cost of production is OMR 4,400;Variable selling and administration overhead per unit OMR 0.500; Fixed selling and administration overhead OMR 800 and Selling price per unit OMR 15. As an Cost accounting student, you are required to calculate and find the right answer for the following questions.

1-If the Salim trading company follows Absoprtion costing method, What will be the Profit?

2-Based upon the information given, What will be the Contribution?

3-In which of the following system, semi variable costs is also segregated into fixed and variable elements?