has no 4.80 2.00 1:20 QUESTION 1 At the start of period one Tommy , opening inventories. Tommy sells his product for 1a por mut incurring the following mit Variable Costs: f Direet materials Direct labour Variable Production overheads Fixed production overheads are 3,000 fixed selling overheads are 1,000, and production and sales are as follows; Pdt Pd2 Sales Production 1600 units Overhead absorption rates are calculated based on budgeted production of 1500 units. Required: 1800 units 1200 units 1400 units a) Prepare profit statements using marginal Casting b) Prepare profit statements using absorption Costing c) Explain why the profit figures differ using different methods. d) Explain why the adjustment is necessary for under and over absorption of overheads in Hue absorption Costing model