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Vanilla House produces non$-$fat frozen yogurt which it sells to restaurants and ice$-$cream shops. The product is sold in $10-$gallon containers, which have the following price and variable costs:

$\backslash$table$[[$Sales price per container,RM$50],[$Direct material,RM$10],[$Direct labor,RM$6],[$Variable Overhead,RM$9]]$

Budgeted fixed overhead in $2019,$ the company first year of operation, was RM$800,000.$ Actual production was $160,000,10$ gallon containers, of which $100,000$ were sold.

The selling and administrative costs that the company incurs in a typical month are as below:

$\backslash$table$[[$Costs Item,Cost formula $($RM$)],[$Advertising$,21,000$ per month$],[$Sales salaries and commissions,$28,500$ per month, plus $5\%$ of sales$],[$Delivery of products to customers,$1$ per gallon sold$],[$Utilities$,10,500$ per month$],[$Depreciation of sales facilities,$240,00$ per month$],[$Executive salaries,$75,000$ per month$],[$Insurance$,12,000$ per month$],[$Clerical$,30,000$ per month, plus RM$2$ per gallon sold$],[$Depreciation of equipment,$9,000$ per month$]]$

Required:

a$)$ Compute product cost per container of frozen yogurt under:

i$)$ absorption costing.

ii$)$ variable costing.

b$)$ Compute operating income for $2019$ using:

$(4$ marks$)$

i$)$ absorption costing.

ii$)$ variable costing.

$(9$ marks$)$

c$)$ Reconcile the absorption and variable costing operating income figures in $($b$).$

$(2$ marks$)$

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