Shine Detergent (M) Sdn. Bhd. produces a special type of detergent for heavy industrial use in Malaysia. The following information was provided by the company for the Second Quarter of 2019:

Per unit:	RM
Selling price	80
Production costs:
Direct materials	20.00
Direct labour	12.00
Variable factory overheads	4.00
Fixed selling costs per quarter	300,000
Fixed production costs per quarter	270,000

Actual details for the months are as follows:

	April	May	June
Production in units	120,000	131,600	128,000
Sales in units	112,000	119,200	120,800

Additional information:

1. The opening inventory on 1 April 2019 was 21,000 units.
2. All the fixed costs would be increased by 40% for the entire second quarter respectively.
3. Fees paid for sales brochure (variable administration cost) will increase 30% when total unit sales exceed target 110,000 units, and 40% when exceed target 115,000.
4. The management will reward the sales staff with 10% of sales bonus when target 115,000 units is achieved.
5. The administration costs and sales bonus will be calculated based on percentage of total sales values for each month.

Required:

Prepare an income statement for each of the three months ended 30 June 2019, using marginal costing method. (19.5 marks)

Part Two

The factory has the policy of giving out RM100 coupon to each of the workers every month. The management forecasts that the coupon amount will be increasing steadily by 15% every year as the production capacity continues to moderately increase over the next 3 years.

Required:

Identify and describe the type of cost behavior of the coupon in both short term and long term with simple chart(s). (6 marks)

show all your workings.