QUESTION 7 Mudada Ltd makes and sells a single product and has total production capacity of 60,000 units per month. The budget for January 2014 contained the following information: Normal capacity (Units) 54,000 Variable costs per unit: Production (GHC) 150 Selling and distribution (GHC) 45 Fixed overheads: Production (GHC) Selling and administration (GHC) 1,420,000 1,200,000 The actual operating data for January 2014 is as follows: Production Sales @ GH250 per unit 24,000 units 22,000 units Opening inventory of finished goods 4,000 units During the month of January 2014, the variable factory overheads exceeded the budget by GH 240,000. Required: (a) Prepare profit statement for the month of January using: (i) Marginal costing: and (ii) Absorption costing. (b) Reconcile the difference in profits (if any), under the two methods. (c) Explain the reason (s) for the difference in the profit figures (if any) under the two methods.