Please answer all questions and include all necessary steps to solving the questions.

2. Targaryen Enterprises Ltd makes a single product called dragon- glass. Information about a unit of dragon-gtass is as follows: Lunit Selling price 45.00 Material 6.00 Labour 10.00 Variable production overhead 4.00 Variable selling costs 3.60 Budgeted xed 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: mm 1 Del t0l W 12992920 Production (units) 60,000 36,000 Sales (units) 55,000 33,000 Required: (a) Present the prot statement for Targaryen Enterprises Ltd for the six months ended 31 December 2020 using absorption costing. Clearly show profitsilosses for each three-month period and in total. (12 marks) Question Continued AC106 201920 A 800 Page 5 (b) Present the prot statement for Targaryen Enterprises Ltd for the six months ended 31 December 2020 using marginal costing. Clearly show profits I losses for each three-month period and in total. (10 marks) (c) Explain why prots 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)