You are working as a manager accountant for a retail company which markets and sells two products product 1 and product 2. The following information is available for last year. The actual fixed product overheads for the same period were 95000 and fixed administration overheads were 25000.

a) Please develop both marginal costing and absorption costing income statements.

b) elaborate the findings, key advantages and limitations.

\begin{tabular}{|l|r|r|} & product 1 & product 2 \\ \hline production & 4000 & 2000 \\ \hline sales & 3900 & 2000 \\ \hline operating inventory & 0 & 0 \\ \hline finantial data & & \\ \hline unit selling & 100 & 50 \\ \hline unit cost & & \\ \hline direct material & 10 & 6 \\ \hline direct labour & 15 & 11 \\ \hline variable production overheads & 15 & 6 \\ \hline fixed production overheads & 25 & 15 \\ \hline variable selling overheads & 1 & 1 \\ \hline \end{tabular}