A Answer ALL questions in this section. [100 Marks] Question 1 (6 Marks) Entity Z is trying to obtain a cost estimate for the costs of repairs. The following monthly repair costs have been recorded for the past six months. Month machines repaired Cost of repairs R 1 23456 41 312232 38 31,000 32,700 25 26,500 23,600 36 29,900 28,900 Required: Use high/low analysis to estimate the fixed costs of repairs each month and the variable cost per machine repaired. Estimate the expected costs of repairs in a month when 30 machines are repaired. Question 2 (10 Marks) A company uses 15,000 units of stock item 6786 each year. The item has a purchase cost of R4 per unit. The cost of placing an order for re-supply is R220. The annual holding cost of one unit of the item is 10% of its purchase cost. Data relating to stores item 6787 are as follows. Daily use: Lead time for re-supply: Reorder quantity: Required: 300 Units 5-20 Days 10,000 Units i. What is the economic order quantity for item 6786, to the nearest unit? ii. What would be the effect of an increase in the annual holding cost per unit on (1) the EOQ and (2) total annual ordering costs? iii. What should be the reorder level for this stock item (6787), to avoid the possibility of inventory-outs? Question 3 (12 Marks) Two grades of direct labour workers are employed to produce units of Product 1234. There are 40 Grade 1 employees and 20 Grade 2 employees. All employees work a basic week of 40 hours. Grade 1 employees are paid R10 per hour and Grade 2 employees are paid R15 per hour. If employees work any overtime, they are paid at time-and-one-third (a premium of one third over the basic rate). There are also five 'support workers', such as maintenance engineers, who are paid R12 per hour for a basic 40-hour week. During Week 23, the Grade 1 employees and support workers each worked 40 hours, and the Grade 2 employees worked 46 hours. Due to difficulties with some equipment, 250 hours of Grade 1 labour and 100 hours of Grade 2 labour were recorded as idle time in the week. During Week 23, 4,000 units of Product 1234 were manufactured. Required: a) Calculate the direct labour costs and the indirect labour costs in Week 23. b) Calculate the direct labour cost per unit of Product 1234 in Week 23. ||