4 Murad Electronics is considering to introduce a new game set using target costing approach. These game sets have a large number of new games which are not available with the previous models. A similar game set on the market that has comparable features to Murad Electronics' game set is selling at RM37.90. The firm has agreed to set a margin on sales of 25%. Cost information for one unit of the new game set is as follows: Production Costs Component A Wire Other material Labor Production overhead January February Each unit cost RM9.60 and delivery costs are RM0.40 per unit. Each unit requires 35 cm of wire but process loss of 2.5% of the purchased wire incurred in the process due to occasionally cut to the wrong length or is damaged. The wire costs RM0.30 per meter. RM7.30 per unit It takes 20 minutes to assemble a game set and the employees are paid RM15.60 per hour. Total (RM) 484,000 460,000 Total labor hours 24,000 22,000 Production overheads (variable and fixed) are absorbed into product costs on labor hour basis based on normal annual activity level. The employees normally worked 288,000 hours in a year. Required: a. Calculate the expected cost per unit for the game set and identify any cost gap that might exist. b. Outline the possible ways that Murad Electronics could take to reduce the cost gap incurred in (c) above