The following data pertain to last year's operations at T Corporation:

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

0

Units produced................................................

20,000

Units sold........................................................

19,000

Selling price per unit........................................

$100.00

Variable costs per unit:

Direct materials............................................

$12.00

Direct labor...................................................

$25.00

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

$3.00

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

$2.00

Fixed costs per year:

Fixed manufacturing overhead....................

$500,000

Fixed selling and administrative..................

$600,000

(a) Prepare a profit statement according to the variable costing system.(4 marks)

(b)Prepare a profit statement according to the absorption costing system.(4 marks)

(c) Explain the difference in profit if any.(2 marks)