Question 4 (10 Marks) Mike. Inc has two products A and B. The budgeted fixed manufacturing overhead is $10,000. The department is expected to work in full capacity. It plans to use cost-based pricing by using the absorption method. Assume the firm can produce and sell 1,000 units Product A and 1,000 units Product B. Direct Materials Direct Labor Variable Manufacturing Overhead Budgeted labor hours used for each unit product Budgeted machine hours used for each unit product Sale Demand Product A $3 $1 $2 1 3 1,000 Product B $2 $3 $1 4 1 1,000 Required Investment Required ROI Rate Unit Variable Selling Expenses Fixed Selling Expenses Product A $5,000 10.00% $1 $2,000 Product B $30,000 5.00% $2 $4,000 Required: a. If allocating fixed manufacturing overhead based on direct labor hour basis, calculate the sale price of products A and B and budgeted profit of products A and B. (4 Marks) b. If allocating fixed manufacturing overhead based on machine hour basis, calculate the sale price of products A and B and budgeted profit of products A and B. (4 Marks) c. Due to the COVID-19 outbreak, the company anticipates a large decrease in sales in 2021. Without preparing income statements, please discuss which product can bring higher net income to the firm and explain why. (Word limit: 100) (2 Marks)