2. A company manufactures a single product with a selling price of K28 per unit. Variable production costs per unit of product are: Direct material K6.10 Direct labour K5.20 Variable overhead K1.60 Fixed production overheads are K30,000 per month. Administration overheads are semi- variable in nature: variable costs are 5% of sales and fixed costs are K13,000 per month. Production and sales quantities over a two-month period are: Production Sales Month 1 4.000 units 3,500 units Month 2 3.600 units 3,800 units Required: (a) Prepare a profit statement for each of the two months using the absorption and marginal costing method. (20 Marks) (b) Provide a reconciliation of the absorption costing and marginal costing profits for Month 1 and 2 ( 5 Marks)