Question 2 Ebby Co. Ltd had the following information for four (4) periods, N (per unit) Selling price Variable costs: Direct materials 60 Direct labour 40 Production overheads 20 Selling and admin 20 240 Fixed costs from standard production capacity of 20,000 units are: Production N400,000 Selling and Administration N600,000 4 Output and sales in units are given below: Periods 1 2 3 Opening stock 6,000 2.000 8,000 6,000 Production 20,000 24,000 18,000 22.000 Sales 24,000 18,000 20,000 24,000 Closing stock 2,000 8,000 6,000 4,000 Required: a) Prepare the operating statement for Nile Manufacturing Ltd using marginal costing and absorption costing [35 marks) b) Discuss three (3) uses of marginal costing in relation to (a) above. [15 marks) (50 marks) 3