Sure-Yummy Taufufa Sdn Bhd, manufactures and sells tau fu fa in Nilai. The company has provided the following data concerning its most recent month of operations:

Selling price ..............................................RM200

Units in beginning inventory ..................... 100

Units produced .......................................... 4,500

Units sold ................................................... 4,300

Variable costs per unit: Direct materials ...................................... RM30

Direct labor ............................................. 40

Variable manufacturing overhead .......... 7

Variable selling and administrative ........ 8

Fixed costs: Fixed manufacturing overhead ............... 225,000

Fixed selling and administrative ............ 172,500

Required:

a) Compute the unit product cost for the month under variable costing. (2 marks)

b) Prepare a contribution income statement for the month using the variable costing method. (8 marks)

c) Without preparing an income statement, determine the absorption costing net operating income for the month.

d) Explain the difference in net operating income of both methods. (7 marks