QUESTION 1 Twist and Turn Ltd, which manufactures and sells a single product, is planning to manufacture 10,000 units in the forthcoming year. The units will be sold for 16 each. The production process involves a machining and an assembly operation. The company has provided the following budgeted information: Direct materials: 0.6 kg at 2.50 per kg 0.7 metres at 3.50 per metre Direct labour: Machining department 0.15 hours at 6 per hour Assembly department 0.10 hours at 5 per hour Variable overheads Absorbed at 6 per direct labour hour in both machining and assembly departments Fixed factory overheads, absorbed at a rate per unit, are expected to be 50,000 for the year and will accrue evenly. Planned production and sales levels for the next three months of the year are as follows: July August September Production (units) 800 800 900 Sales (units) 700 800 800 There is no stock of finished units at the beginning of July. Required (a) Prepare budgeted manufacturing and trading accounts for the period July to September using: absorption costing (ii) marginal costing