QUESTION 1 [30 MARKS] Read the following information and answer the questions that follow. Thotho manufactures headscarves. The following information is available in her Books on December 31, 2012. BWP Opening inventory 1,500 Headscarves made during the year 9,000 Headscarves sold during the year 9,500 Closing inventory 1,000 Selling price 90 Manufacturing costs: Variable costs: - Direct material/headscarf - Direct labour hour cost used to make one scarf - Variable manufacturing overhead Fixed manufacturing overheads per year 25 9 5 150,000 Selling and administrative costs: Commission paid for selling one scarf Fixed selling and administration costs per year 10 100,000 Required: a) Prepare the income statement for the year ended December 31, 2012 using Degree Sessional Structured Timed Assessment July - December BMA721 Business Management Accounting BOU 2021 Page 8 of 9 i) Variable costing. (15 marks) ii) Absorption cost (15 marks)