Solo limited makes and sells a single product. The following data relate to periods 1 to 4

Variable cost per unit is shs.30

Selling price per unit is shs. 55

Fixed costs per period is shs. 6000

Normal activity is 500 units and production and sales for the four periods are as follows:

Period 1 units - sales is 500 & production is 500

Period 2 units - sales is 400 & production is 500

Period 3 units - sales is 550 & production is 450

Period 4 units - sales is 450 & production is 500

There were no opening stocks at the start of period 1

Required:

a) Prepare operating statements for each of the periods 1 to 4, based on marginal costing principles.

b) Prepare operating statements for each of the periods 1 to 4, based on absorption costing principles.

c) Comment briefly on the results obtained in each period and in total by the two systems.