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

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

The above fxed production overhead absorption rete is besed on budgeited production of $12,000$ units per period.

Budgeted non$-$production overhesd $($sll fred$)$ is R$16,800$ per period.

Actual sales and production for two periods has been:

There was no sibck at the siat of Period $1.$ The seling price, unit variable costs and total fuxed costs were as per

budget in both periods.

REQUIRED

$1\mathrm{.}1$ Prepare statements of Comprehengive income for both periods $($is period $1$ & Period $2),$ using absorpton costing,

showing the actual result for each of the two periods.

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

marginal costing.

$1\mathrm{.}2$ Prepare the statement of comprehengive 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 profis reported in period $1$ dffer when proft is calculated using absorption costing and

marginal costing. Calculations are required to support your explanation.