2. Targaryen Enterprises Ltd makes a single product called dragon- glass. Information about a unit of dragon-glass is as follows: Selling price Material Labour Variable production overhead Variable selling costs /unit 45.00 6.00 10.00 4.00 3.60 Budgeted fixed production costs accrue evenly throughout the year and total 432,000. Budgeted annual production and sales are both 144,000 units. There is no opening inventory on 1 July 2020, the company expect the following to occur in the next six months: Production (units) Sales (units) 1 Jun to 30 Sep 2020 60,000 55,000 1 Oct to 31 Dec 2020 36,000 33,000 Required: (a) Present the profit statement for Targaryen Enterprises Ltd for the six months ended 31 December 2020 using absorption costing. Clearly show profits/losses for each three-month period and in total. (12 marks) (b) Present the profit statement for Targaryen Enterprises Ltd for the six months ended 31 December 2020 using marginal costing. Clearly show profits / losses for each three-month period and in total. (10 marks) (c) Explain why profits differ for each three-month period and in total over the six months. Note: Maximum word limit of 75 words (4 marks) (d) Explain why Targaryen Enterprises Ltd might prefer to use absorption costing as a basis for pricing dragon-glass. Note: Maximum word limit of 75 words (4 marks) (Total: 30 marks)