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QUESTION 4: X Market Inc. has a cost system consisting of 1 direct cost and 3 indirect cost categories. Indirect costs occur as follows. Handling costs; depends on the number of parties Production costs; depends on machine hour Engineering costs; depends on each change (design) process As a result of competitive pressures, X Market Inc. started value engineering studies to reduce production costs. The figures for 2019 and 2020 are as follows: Handling costs (per part) 2019 16.000 TL 2020 15.000 TL Production costs (per machine hour) Engineering costs (per change) 40 TL 24.000 TL 30 TL 20.000 TL X Market management wants to evaluate the success of value engineering studies. For this, he wants to see if the costs of the H56 (pacemaker) product are reduced by 15 % as targeted. Information about the product is given below. H56 number of units produced Direct cost (TL/units) Number of parts Machine hour Number of changes 2019 700 units 2.400 TL 2020 800 units 50 4.200 hours 2.200 TL 60 4.400 hours 15 10 Required: a. Calculate the H56 production cost for 2019. (10p) b. Calculate the H56 production cost for the year 2020. (10p) c. Has the target cost been realized in 2020? (10p) d. Have the costs been reduced in 2020? (10p)