The following information relates to the unit manufacturing costs of product Wye by the Marino Company.

Shs

Selling price

Cost of sales:

100

Variable costs

65

Fixed costs

20

85

Gross profit

15

Selling and administrative costs

10

Net profit

5

The company budgets for fixed production costs o Sh.3,600,000 and selling and administrative costs of Sh.750,000 per annum. These costs are incurred evenly during the year.During the latest financial year, the following results were achieved:

First 6 months

Second 6 months

Production (units)

75,000

60,000

Sales (units)

50,000

70,000

There were no opening stocks at the beginning of the year.Fixed production costs and selling and administrative costs incurred during the year were equal to the budget.

Required

Prepare trading, profit and loss statements for each of the two six month periods using each of the following methods:

Absorption Costing (5 marks)

Marginal Costing. (5marks)