QUESTION 2 Advance Limited is a manufacturing company making a singlre product. Over the last three financial periods the following information has been collected: Period 3 40,000 Sales (in units) Opening stocks (in units) Closing stocks (in units) Period 1 50,000 10,000 30,000 Period 2 70,000 30,000 20,000 The selling price per unit is $20 and direct material and labour costs per unit total $10. Manufacturing overheads are all fixed costs and are absorbed into product costs at pre-determined rates per unit of output. Any under or over-absorbed manufacturing overheads are transferred to profit and loss account in the period in which they arise. Manufacturing overheads total #300,000 per period and normal production capacity is 60,000 units per period. All prices remained constant over the three periods. REQUIRED (a) Calculate the number of units required to be sold in each period to break even; (b) Calculate the profit (or loss) arising in each of the three periods; using absorption costing technique; (c) Recalculate the profit (or loss) arising in each of the three periods using marginal cost technique; Briefly reconcile your answer to part (b) with your answer to part (c) above