The following is an extract from 2018 accounting records of Muller Ltd:

Units in beginning inventory	0
Units produced	20,000
Units in ending inventory	4,000
Selling price per unit	20
Manufacturing costs
Direct materials (per unit)	4
Direct labor (per unit)	2
Variable overhead (per unit)	1
Fixed overhead (total)	60,000
Selling and Administrative expenses
Variable (per unit)	3
Fixed	40,000

Required:

1. Compute the following using absorption costing and marginal costing:

1. unit cost

(3 marks)

2. cost of goods sold

(1 marks)

3. ending inventory

(1 marks)

2. Prepare an income statement using

1. absorption costing and

(5 marks)

2. marginal costing

(5 marks)

(Total 15 marks)