BFA612 managerial and cost accounting

3:15:00 Tasmanian Office Products (TOP) produces three different paper products at its manufacturing plant: Xa, Xb and Xc. Each product has its own dedicated production line, at the plant. The company currently uses the following three-part classification of its manufacturing costs: direct materials, direct manufacturing labour, and manufacturing overheads. Total manufacturing overhead costs of the plant, in July 2020, were $160,000, of which $20,000 are fixed). This total amount is allocated to each product line, based on the line's direct manufacturing labour costs. The summary of data for July 2020, is as follows: Xa xb Xc Direct materials costs $90,000 $70,000 $60,000 Direct manufacturing labour costs $18,000 $25,000 $10,000 Manufacturing overhead costs $48,000 $78,000 $34,000 Number of units produced 120,000 160,000 130,000 Required a) Calculate the manufacturing cost, per unit, for each product produced in July [5 marks] 2020, using the full-costing method (i.e., the absorption costing system). b) If, in August 2020, production was 150,000 units of Xa, 190,000 units of Xb and 220,000 units of Xc, why might the July 2020 information on manufacturing cost per unit be misleading when predicting total manufacturing costs for August 2020? What is your recommendation to correct this? 10 markel