Aggarwal Industries Ltd has a standard variable manufacturing cost of `8 per unit produced. Fixed production costs are `1,10,000 per month (for standard volume of 11,000 units per month) and fixed...

Aggarwal Industries Ltd has a standard variable manufacturing cost of `8 per unit produced. Fixed production costs are `1,10,000 per month (for standard volume of 11,000 units per month) and fixed selling and administrative expenses are `70,000 per month. The firm begins January with no inventories and had the following activity in January, February and March:

The selling price was `30 per unit in each month. You are required to prepare monthly income statements using both variable and absorption costing methods. You are also required to account for the difference, if any, in the results reported under the two methods.