Trial Question/Assignment KK Ltd makes and sells one product, which has the following standard production cost. Direct Labour (3hrs @ GH6 per hour) Direct materials (4kg @ GH7 per kg) Production overheads: Variable Fixed Standard Cost per unit GH 18 28 3 20 69 Normal output is 16,000 units per annum. Variable selling, distribution and administration costs are 20 percent of sales value. Fixed selling, distribution and administration costs are GH180,000 per annum. There are no units in finished goods inventory at 1 January 2018. The fixed overhead expenditure is spread evenly throughout the year. The selling price per unit is GH140. Production and sales budgets are as follows: Production (units) Sales (units) Jan-June 2018 8,500 7,000 Jul-Dec 2018 7,000 8,000 Required: Prepare Income statement for the 2 periods using 1. a. 2. Marginal Costing b. and Absorption costing Reconcile the Marginal Costing Profits with Absorption costing profits