2 Individual Cost Concepts and Cost Behavior Question 1 Cost behavior analysis Al-Faisal Company wants to develop an estimate of its materials Storeroom costs. Alex Molly the controller, has collected what he believes to be the relevant data for the past 12 months. It is Mr. Molly's professional opinion that the storeroom costs should be closely related to the volume of the shipments received; thus, he has provided you with the following information Month Number of Shipments Storeroom Costs January.... 300 $6,000 February... 425 8,600 March.. 375 5,300 April.. 275 4,800 May... 250 4,500 June... 325 5,200 July. 300 4,250 August.... 650 9,400 September. 375 5,100 October. 290 3,500 November. 450 6,850 December.. 280 3,750 Required task: Prepare a cost function (formula) for the storeroom costs using the High-Low cost-behavior method (Show calculations) (3 marks) [Marks distribution: calculation of fixed costs and variable costs 2 marks and the cost formula 1 marks]. Question 2 Cost Concepts Al-Safi Furniture Company manufactures outdoor furniture and incurred the following costs during the month of August 2022: Timber Paint Glue Wages-assembly personnel Wages-factory supervisor Factory cleaner's wages Sales commissions Depreciation-factory equipment $ 25 000 5000 500 $ 20000 $ 3500 $ 2000 $ 10000 Administrative staff salaries $ 4000 $ 3000 Depreciation-sales office equipment $ 1000 $ 6000 $ 2000 $ 8000 $ 90.000 Ubilities, insurance-factory Utilities, insurance-sales office Advertising Total costs 2 Required: Compute the total product cost classifying under Direct Materials, Direct Labor, and Factory Overhead (2 marks = 1 mark for correct classification of cost and 1 mark for the correct total product cost) Write your answer below 2 3