Unformatted text preview: no opening inventory units) (4 marks) You are asked to draw up an Absorption Costing Income Statement for year 3 only. Fixed Manufacturing
overheads are applied to products on the basis of units produced for the year (i.e. the application rate is
re-calculated each year), and over or under-applied overheads are written off against Cost of Goods Sold. (11 marks) Reconcile the difference in Net Income between the Variable Costing and Absorption Costing methods
for Year 3 only. (4 marks) MARKS ARE ALLOCATED TO WORKINGS AND WILL ONLY BE AWARDED WHERE THESE ARE CLEARLY SHOWN. Compiled by Colin C Smith 2013...
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