QUESTION TWO The NT Compnay, which is under contract to the US navy, assembles troop redeployment boats. As part of its research program, it completes the assembly of the first of the new model (PT109) of redeployment boats. The navy is impressed with the PT109. It requests that NT company submits a proposal on the cost of producing another seven (7) PT109s. NT Company reports the following cost information for the first PT109 assembled and uses 85% cumulative average time learning model as a basis for forecasting direct manufacturing labour hours for the next seven PT109s. Direct Materials Direct manufacturing labour hours for first boat Direct manufacturing labour rate Variable manufacturing overhead cost Other manufacturing overheads Tooling costs* K100,000 10,000 hours K30/hour K20 per hour 25% of direct labour cost K500,000 *Tooling can be reused at no extra cost because all its costs been assigned to the first deployment boat. Required a) Calculate the predicted total costs of producing all the seven PT109s for the Navy b) Calculate the predicted cost of producing the seventh PT109 for the navy