Kano Textile Mills Plc produces two products: 'KanoWeave' (KW) and 'KanoSheen' (KS). The company currently uses absorption costing for all internal and external reporting. The Board of Directors is reviewing the company's costing system following a period of fluctuating profits that did not appear to correspond with changes in sales volumes. The Finance Director suspects that inventory level movements are distorting reported profits. The following information is available for the year ended 31 December 2024: Product data (per unit): KW KS Selling price N500 N380 Direct materials N120 N90 Direct labour (N40/hr) N80 N60 Variable production overhead N40 N30 Budgeted annual fixed production overhead: N4,800,000 Budgeted annual machine hours: 60,000 hours Fixed overhead is absorbed on the basis of machine hours. Machine hours per unit: KW: 3 hrs KS: 2 hrs Actual production and sales for the year: KW KS Production (units) 6,000 8,000 Sales (units) 4,500 9,000 Opening inventory (units) 500 1,200 Actual fixed production overhead incurred: N4,920,000 Variable selling costs: N15 per unit sold for both products Fixed selling and administration overhead: N600,000 Required: (a) Calculate the absorption costing profit or loss for the year ended 31 December 2024 for each product and in total, clearly showing the under or over absorption of fixed production overhead. (14 marks) (b) Calculate the marginal costing profit or loss for the year ended 31 December 2024 for each product and in total. (8 marks) (c) Prepare a statement reconciling the total absorption costing profit with the total marginal costing profit. (4 marks) (d) Advise the Finance Director on whether the Board's concern about inventory movements distorting profit is valid, citing the results from (a) and (b) above to support your answer. (4 marks) Total: 30 marks