Starfire Company, which has only one product, has provided the following data concerning its most recent month of operations: Selling price RM90 Units in beginning inventory 500 Units produced 12,000 Units sold 11,800 Variable costs per unit: Direct materials RM25 Direct labor RM12 Variable manufacturing overhead RM8 Variable selling and administrative RM5 Fixed costs: Fixed manufacturing overhead RM60,000 Fixed selling and administrative RM152,000

The company produces the same number of units every month, although the sales in units vary from month to month. The companys variable costs per unit and total fixed costs have been constant from month to month.

Required:

a) Calculate the cost of one unit of product under absorption costing. (3 marks)

b) Calculate the cost of one unit of product under variable costing. (3 marks)

c) Calculate Starfires next year operating income under absorption costing. (6 marks)

d) Calculate Starfires next year operating income under variable costing. (6 marks)