Touch light is manufactured by QQ Ltd. The following data pertain to the company's operations last year: Units in beginning inventory 5,000 Units produced 60,000 Units sold 40,000 Selling price per unit RM8 Variable costs per unit: Direct materials RM2 Direct labor RM1.60 Variable manufacturing overhead RM0.80 Variable selling and administrative RM0.60 Fixed costs in total: Fixed manufacturing overhead RM20,000 Fixed selling and administrative RM5,000

Required: (a) Prepare an income statement for the year using variable costing. (11 marks) (b) Distinguish between variable and absorption costing and describe how nonmanufacturing fixed costs are treated in these two costing systems