13.500 Question 2 (30 marks) A- Keys Company accumulates the following data concering a mixed cost, using miles as the activity level. Miles Driven Total Cost January 10,000 $15.000 February 8,000 March 9,000 14,400 April 7,500 12.500 Reguired: Compute the variable and fixed cost elements using the high-low method 2. If it is estimated that 12,000 miles will be drive in May, what is the expected total cost for May? Marks) (7.5 B-XYZ Company sells its only product for S40 per unit. Its total fixed costs are $180,000 per annum. Its CM ratio is 20%. XYZ plans to sell 16,000 units this year. Required: 1. Calculate CM per unit and the variable cost per unit. 2. Calculate break-even point in unit sales and in dollar sales? 3. Calculate the unit sales and dollar sales required to achieve a target profit of $60,000 per year? 4. Assume that the company is able to reduce its variable costs by S4 per unit and accordingly the sales price per unit will also be reduced by 5% Calculate the company's new break-even point in unit sales and in dollar sales? Calculate dollar sales required to achieve a target profit of $60,000? 5. In your opinion, did you think the company would be better off with the assumed reductions in (4)? Why? (12.5 marks) C-Management of Farah Corporation has asked your help as an inter in preparing some key reports for April. Direct labor cost was $25,000 Total manufacturing costs during April were S176,000. Direct labor cost was 20% of prime cost. Required: Calculate direct material cost and the manufacturing overhead cost (5 marks) D- Sun Company and Moon Company are identical in all respects except that most of Sun company costs are variable, and most of Moon company costs are fixed. In case sales increase (for both companies), which of the two companies will tend to realize the greatest increase in its net income? Why