Question 4 (20 Marks – 36 Minutes) Nov Sup. 2014 OpuwoInvestment CC opened a new manufacturing facility. In the firstmonth the following changes were observed in their inventory:Opening inventory nil Produced 16 000 units Sold 12 000 unitsClosing inventory 4 000 units Each unit is sold for N$35. The costsincurred are as follows: Materials N$15 per unit produced LabourN$7 per unit produced Indirect manufacturing costs (fixed) N$40 000Selling cost (fixed) N$15 200 Administration costs (fixed) N$23 600Page 6 of 66 REQUIRED MARKS 4.1. Prepare a statement ofcomprehensive income using the marginal costing approach. 8 4.2.Prepare a statement of comprehensive income using the absorptioncosting approach. 8 4.3 Reconcile the profit of the absorptioncosting and marginal costing method 2 4.4 Explain the difference inprofit between the two approaches. 2 TOTAL MARKS 20
