Solution:

(a)

Income Statement (Marginal Costing)

For the year ending……………………….
Amount Amount
Particulars (₹) (₹)
Sales (1000 units *15) 15000
Variable Manufacturing Cost:
1100 units * 7
Cost of goods produced 7700
Less Closing Stock (100 units * 7) (700)
Cost of goods sold 7000

Variable selling and administration overhead (1000 units *0.5) 500

Total Variable cost (7500)
Contribution (Sales- Variable Cost) 7500
Less Fixed overheads:
Manufacturing overhead 2200
Selling and Administration overhead 400 (2600)
Profit 4900