You are required to:

$($a$)$ Prepare profit and loss statements for the months of January and February on

the basis of:

$($i$)$ Marginal costing

$($ii$)$ Absorption costing

$($b$)$ Reconcile the profit $/($Loss$)$ figures between the two methods.$($ii$)$ The following budgeted information relates to BUSY Ltd$.,$

a company that sells one product.

Fixed production costs are $75,000$ per month. It is assumed that fixed production

costs are to be absorbed on the basis of monthly production. There is no opening

stock.