QUESTION 2 Abuja Power Solutions Limited (APSL) is a Nigerian company that manufactures and sells inverter systems and solar panels to residential and commercial customers across the Federal Capital Territory. The company operates three production departments: Assembly, Testing, and Packaging. The following information relates to the financial year ended 31 December 2023: Total costs incurred: - Direct materials consumed: N18,750,000 - Direct labour (Assembly department): N6,400,000 - Direct labour (Testing department): N3,200,000 - Direct labour (Packaging department): N1,800,000 - Indirect factory wages: N2,500,000 - Factory insurance: N900,000 - Power costs (factory): N1,400,000 (60% fixed, 40% variable) - Depreciation — factory equipment: N1,200,000 - Sales commission (5% of sales revenue): N2,625,000 - Administrative salaries: N3,600,000 - Bad debts written off: N450,000 - Research and development expenditure: N1,100,000 - Carriage outwards: N380,000 Additional information: - Units produced during the year: 5,250 inverter systems - Units sold during the year: 5,000 inverter systems - Sales revenue: N52,500,000 - Opening inventory of finished goods: Nil Required: (a) Prepare a Statement of Cost of Production for APSL for the year ended 31 December 2023, clearly distinguishing between prime cost, factory overhead, and cost of production. (10 marks) (b) Using the data above, prepare a Statement of Cost of Goods Sold and Gross Profit for the year ended 31 December 2023. (6 marks) (c) (i) Explain the concept of 'relevant range' as it applies to cost behaviour analysis. (3 marks) (ii) With specific reference to the power costs of APSL, explain how a cost accountant would separate the fixed and variable components using the information provided, and state ONE other method that could have been used to achieve this separation if the percentage split had not been given. (6 marks) Total: 25 marks