Question 1 (30 marks) Namibia Sugar Refinery ("NSR") refines and sells a special icing sugar. At full capacity, the company produces 300 000 kilos. However, currently the company is utilizing only 95% of its capacity and this is considered its normal capacity. The following is the information that relates to the 2022 financial year ending 31 July 2022: Budgeted costs: Variable production cost per kilo Fixed manufacturing costs per year Variable selling costs per kilo Fixed selling costs per year For the financial year ended 31 July 2022, the company produced 240 000 kilos and sold 225 000 kilos at N$30 per kilo. The closing inventory at 31 July 2022 was 30 000 kilos. The variable production costs were N$52 500 higher than the budget. REQUIRED: 1.1 Prepare NSR profit statement for the year ended 31 July 2022 using absorption costing Prepare NSR profit statement for the year ended 31 July 2022 using marginal costing N$ 16.50 540 000 4.50 405 000 1.2 1.3 Reconcile profits absorption costing profit to marginal costing profit Explain in detail to the management of NSR why the profits reported by the two methods different. No calculations are required 1.4 Total marks Marks Sub- total 15 9 3 3 Total 30 15 24 27 30