1) ABC limited sells its product at 3 rupees per unit. The company uses a First-In First-Out actual costing system. A new fixed manufacturing overhead allocation rate is computed each year by dividing the actual fixed manufacturing overhead cost by the actual production costs. The following simplified data are related o its first two years of operation: Year I Year II a) Sales(units) 1000 1200 b) Production(units) 1400 1000 c) Costs: ? ? • Variable manufacturing 700 500 • Fixed manufacturing 700 700 • Variable marketing and Administration 1000 1200 • Fixed marketing And administration 400 400
Required: Prepare income statement based on: Absorption costing