Sihat Selalu Sdn.Bhd. (SSSB) manufactures safety and high quality bicycle helmets for kids. As SSSB's senior financial analyst, you are asked to recommend a method of inventory costing. The Managing Director will use your recommendation to prepare SSSB's 2017 income statement. The following data is for the year ended 31 December 2017: Assume standard costs per unit are the same for units in beginning inventory and units produced during the year. Required: a) Compute the product cost per unit under variable and absorption costing. b) Prepare operating income statement under variable and absorption costing for the year ended 31 December 2017. c) Explain the difference in operating income between the two costing methods. d) Which costing method would you recommend to the Managing Director? Give TWO (2) reasons.

Sihat Selalu Sdn.Bhd. (SSSB) manufactures safety and high quality bicycle helmets for kids. As SSSB's senior financial analyst, you are asked to recommend a method of inventory costing. The Managing Director will use your recommendation to prepare SSSB's 2017 income statement. The following data is for the year ended 31 December 2017: Assume standard costs per unit are the same for units in beginning inventory and units produced during the year. Required: a) Compute the product cost per unit under variable and absorption costing. b) Prepare operating income statement under variable and absorption costing for the year ended 31 December 2017. c) Explain the difference in operating income between the two costing methods. d) Which costing method would you recommend to the Managing Director? Give TWO (2) reasons