Exhibit 1: Happy Ltd is company that makes and sells a single product. At the beginning of period… 1 answer below »

Exhibit 1: Happy Ltd is company that makes and sells a single product. At the beginning of period 1, there are no opening stocks of the product, for which the variable production cost is Ksh.4 and the sales price $6 per unit. Fixed costs are $2,000 per period, of which $1,500 are fixed production costs. Period 1 Period 2 Sales 1,200 units 1,800 units Production 1,500 units 1,500 units What would the profit be in each period using the following methods of costing? a) Absorption costing. Assume normal output is 1,500 units per period. b) Marginal costing. Exhibit 2: Happy Ltd when opening stocks were 8,500 were 8,500 litres and closing stocks 6,750 litres, affirm had a profit of $.62,100 using marginal costing. Assuming that the fixed overhead absorption rate was $3 per litre, what would be the profit using absorption costing? a) $41,850 b) $56,850 c) $.67,350 d) $.82,350