QUESTION 3 [20 MARKS] Abacon Ltd started operating on 1 July 2015 making one product only, the cost card of which is as follows: P Direct materials 50 Direct labour 80 Variable production overhead 20 Fixed production overhead 50 Standard production cost 200 The fixed production overhead figure has been calculated on the basis of a budget normal output of 360,000 units per annum. The production overhead incurred in July 2015 was P150, 000 each month. Selling, distribution and administration expenses are: Fixed P100, 000 per month Variable 15% of the sales value The selling price per unit is P500 and the numbers of units produced and sold were: July (units) Production 2,000 Sale 1,500 REQUIRED: Prepare the income statements for July 2015 for Abacon Ltd using; i) Absorption costing method (10 marks) ii) Marginal costing method (10 marks)