A company manufactures and sells a single product. Budgeted data per unit of the product is:

Selling Price R$8\mathrm{.}50$

Variable Cost$*$ R$3\mathrm{.}70$

Fixed production overhead R$2\mathrm{.}90$

$*$All variable costs are manufacturing i$.$e there are no non$-$manufacturing variable costs.

The above fixed production overhead absorption rate is based on budgeted production of $12,000$ units per period. Budgeted non$-$production overhead $($all fixed$)$ is R$16,800$ per period.

Actual sales and production for two periods has been:

Period $1$ Sales $11600$ units and production $12000$ units

Period $2$ Sales $12400$ units and production $12300$ units

There was no stock at the start of Period $1.$ The selling price, unit variable costs and total fixed costs were as per budget in both periods.

The company wishes to compare the results reported in $(1\mathrm{.}1)$ above with those that would be reported using marginal costing.

$1\mathrm{.}1$ Prepare statements of Comprehensive income for both periods $($IE period $1$ & Period $2),$ using absorption costing, showing the actual results for each of the two periods.

$1\mathrm{.}2$ Prepare the statement of comprehensive income for periods $($ie period $1$ & Period $2),$ using marginal costing, showing the actual results for each of the two periods.

$1\mathrm{.}3$ Explain fully why the profits reported in period $1$ differ when profit is calculated using absorption costing and marginal costing. Calculations are required to support your explanation.