a) Bobby Co. prepares the standard cost card for their product called Boo, showing all standard costs and the standard selling price. A single unit of product Boo is made by using of three types of direct material as follows: - 5 kg of direct material X, costing $6.00 per kg - 7 liters of direct material Y, costing $7.50 per liter 10 meters of direct material Z, costing $9.00 per meter The standard material price for all three types of direct material mentioned above is expected to increase by 20% since their suppliers have changed their distribution channel. A unit of a customized component will be needed costing $13.00 per unit. Two types of labor force are involved in the production of a unit of Boo, which are the skilled labor and semi-skilled labor. The hourly labor rate of for each type of labor is $60 for skilled labor and $30 for semi- skilled labor. Twice as many semi-skilled labor hours as skilled labor hours are needed to produce a unit of product Boo and two (2) hours of skilled labor hours is being needed. Variable production overheads are incurred at the rate of $60.00 per skilled labor hour. A system of absorption costing is in operation on fixed production overhead costs and basis of absorption is using the total labor hours. The budgeted fixed production overheads are $2,000,000 and the budgeted level of activity is 25,000 units. Selling and distribution overheads costs are added to products at the rate of 10% of standard full production costs. A profit margin of 25% is to be made on each unit of Boo that is sold. Required: Prepare the standard cost card for the product Boo based on the information given above. (15 marks) b) Discuss FIVE (5) problems of setting standards in a standard costing system