Question 3 a. Explain what you understand by the terms Absorption (Full) costing and Marginal (Variable) costing'. b. Cheriton Company makes and sells plastic chairs. The company prepares variable costing income statements for management and absorption costing income statements for external use. In May 2019, it produced 22000 units and sold 20000 units. Beginning inventory was 2000 units. The records show the following details for May 2019. $100 Selling price Direct materials cost Direct labour cost per hour Variable manufacturing overhead cost Variable selling expense Fixed manufacturing overhead cost Fixed admin. and distribution cost $220000 $100000 Required: a. Prepare a profit and loss account using Variable costing b. Prepare a profit and loss account using Absorption costing