Pearl Company Ltd Has been operating for some years, utilizing overhead variable techniques to reflect the charging of overheads into production cost Management has recently received a report, however, from a member of staff who attended a short course on accounting techniques This report highlighted another technique for dealing with the treatment of a fixed portion of manufacturing overheads the absorption approach Management is impressed by the report and has decided, a special exercise the account of financial year just ended should be shown under both techniques and have already asked you, the company`s accountant to undertake this task

The following information is relevant to the year ended 30th June 2022.

Production unit 65,000

Sales (50,000

Selling price GHS 300

Direct Labour 8,775,000

Direct material 7,800,000

Variable manufacturing cost 52,000

Depreciation 97,500

Royalties 91,000

Administration overhead 780,000

Office rent 13,000

Variable Selling Overhead 39,000

You are required to,

I. Calculate the cost per unit under Absorption and marginal costing

Ii. Prepare a profit and loss account for the year ended 30^th June 2022, using the variable approach

iii. Prepare a profit and loss account for the year ended 30th June 2022, using the fixed overhead absorption approach as employed by the company.

iv. Prepare a reconciliation for the two income statements.

v.State two limitations of the marginal costing system.