The information below relates to data concerning a company's operations in a year:

Units in beginning inventory.........................

0

Units produced..............................................

10,000

Units sold.......................................................

9,000

Selling price per unit......................................

RM60

Variable costs per unit:

Direct materials...........................................

RM15

Direct labor.................................................

RM5

Variable manufacturing overhead...............

RM2

Variable selling and administrative.............

RM4

Fixed costs in total:

Fixed manufacturing overhead...................

RM200,000

Fixed selling and administrative.................

RM70,000

Direct labour here is a variable cost.

Required:

(a) Prepare the statement of profit or loss for the year using absorption costing.(8 marks)

(b) Prepare the statement of profit or loss for the year using variable costing.(8 marks)

(c) The mooncake is a Chinese bakery product traditionally eaten during the Mid-Autumn Festival, celebrated on the eight month of the Chinese Lunar calendar. If you are the management accountant of a company producing mooncakes and other festive delicacies, explain the impact of sales and production cost of such a product on profits if (i) absorption costing, or (ii) variable costing is adopted, clearly proposing which costing system is most suitable here.(9 marks)