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Playtime Ltd produces jigsaws for sale in model shops. The following information relates to the sales and costs of producing the jigsaws.Selling price per unit is £20Variable cost per unit is £10Fixed costs of the period are £800Volumes of production and sales are as follows for periods 1, 2 and 3.Period 1 Period 2 Period 3 unitsunitsunitsProduced 250 200 180 Sold 210 210 210 Held in stock at end of period 40 30 nil 124Part 1Dening, reporting and managing costsRequired(a) Using absorption costing, what is the profit of Period 2?(b) Using marginal costing what is the profit of Period 2?(c) Compare the profit of Period 1 under absorption costing with that calculated under marginal costing and explain the difference.(d) Using absorption costing, calculate the value of closing stock at the end of Period 1. (e) Using marginal costing, calculate the value of closing stock at the end of Period 1.
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