QUESTION 1

Explain the following cost behavior.

i) Variable cost ii) Fixed Cost iii) Mixed Cost

(Draw the graph and provide one example of each cost behavior.)

2 QUESTION

TWK Sdn.Bhd. is a manufacturing company. The following relates to budgeted production of 100 units of product AB:

i. Direct material costs: 100 units @ RM50 per unit. ii. Direct labour rates are:

JOB A: Assembly = RM 8 per hour

JOB B: Packing = RM 7 per hour

JOB (100 units of AB)	Labor Hours
Assembly	60
Packing	36

Factory overhead to produce 100 units of product AB is RM 1,200.

Direct expenses are RM850.

Required:

Calculate the PRIME COST of product AB.

Calculate the PRODUCTION COST of product AB.

Calculate the selling price of the job if the profit is set at 20% mark-up.