2 The following data has been compiled for a product made by Taylor Ltd. The budgeted annual production is 21,000 units and the fixed production overhead is budgeted as 147,000 per annum. Unit Marginal and Absorption costs are as follows: Marginal Absorption (E) (E) Direct Materials 12 12 Direct Wages 14 14 Variable Factory Overheads 2 2 Variable Production Overhead 28 28 Fixed Production Overhead 7 Unit Cost 28 35 The actual production and sales relating to June and July are as follows: Sales Production The Selling Price per unit is 45. The Variable Selling cost per unit is 4. June Units July Units 1,500 1,850 1,800 1,650 Fixed Administration overheads are estimated to be 6,000, per year. There was no opening stock at the beginning of June. Required: a. Calculate total profit using Marginal Costing. b. Calculate total profit for January using Absorption Costing. c. Explain why the profit calculated using Absorption Costing is higher than the profit calculated for Marginal Costing for the month of June