Additional information is as follows: Budgeted fixed production overhead was RM600,000.00 per annum. Actual fixed production overhead for the period was RM45,000.00 per month. Sales and marketing overhead of RM25,000.00 per month and administration overhead ofRM18,750.00 per month were in line with the budget for that period. All fixed overhead costs are budgeted on the basis of a projected volume of 80,000 unitsper year and all costs are expected to be incurred at a constant rate throughout the year. The business does not expect to have any inventory at 1 September.REQUIRED:a. Prepare a profit statement for the month of September and October using the followingbases:i. Absorption costingii. Marginal costing [12 Marks]b. Calculate the (under)/over absorbed fixed production overhead for September and October(if any).[4 Marks]c. Explain why the net profit figures are different under absorption and marginal costing.Support your answer with a profit reconciliation statement.[4 Marks]

QUESTION 2 (20 MARKS) Ashley Furniture is a leading home furniture brand, manufactures a wide range of living room, dining room and bedroom furniture. Recently, the company has expanded its range of product line to manufactures beds for students in a private hostel. The production of the bed is expected to start in September. In order to build up inventory in anticipation of an increase in demand that is expected later in the year, production is to exceed sales in the first three months of the year as follows: Month Sales (units) Production (units) September 4,750 5,000 October 5,500 6,000 November 6,500 7,000 The company's computerized cost accounting system has produced the following information relates to the production of hostel bed for the first three months of the product's life: RM/unit Selling price 250.00 Direct material cost 55.00 Direct labour cost 45.00 Variable production overhead 10.00 Variable sales & marketing overhead 8.00