THE HOTEL produces a single product.

The following cost information has been prepared, based on a budgeted normal operating capacity of 20 000 units produced and sold, per three-month period (i.e. per Quarter):

Direct labour (4 hours x R20/hr) = R80

Direct material (4 kgs x R15/kg) = R60

Manufacturing Overheads (Variable and Fixed) = R40

Variable selling (Per unit sold) = R10

Fixed Administration (Per unit sold) = R50

The budgeted manufacturing overhead for the three-month period, assumed the following cost volume relationship:

Overheads	R750 000	R800 000	R850 000
Units	15 000	20 000	25 000

QUESTIONS:

1. What is the prime cost unit?

2. What is the product cost per unit according to variable costing

3. What is the product cost per unit according to absorption