Jackson Ltd had the following operating data for its first year of operation ending on 31 December 2019:

Units produced 60 000

Units sold 57 400

Selling price per unit $32

Variable costs per unit:

Direct materials $9.00

Direct labour $6.50

Variable manufacturing overhead $3.60

Variable selling expenses $3.00

Fixed costs per year:

Fixed manufacturing overhead $234,000

Fixed selling and administrative expenses $236,000

There are no work-in-process inventories. Normal production capacity is 60 000 units. Expected and actual overhead costs are the same.

Required:

2. construct an absorption costing income statement for Jackson Ltd for the year ending 31 December 2019.
4. constuct a variable costing contribution margin statement for Jackson Ltd for the year ending 31 December 2019.
6. Reconcile the differences between the profits under the two statements.
8. Discuss two advantages and two disadvantages of using variable costing for internal reporting.