Exercise 3 (week 3): Costing at ICE Ltd This exercise is based on the materials of session 3 (week 3). Read the short ICE Ltd case description provided below and answer the below questions. ICE Ltd ICE Ltd is a small manufacturer of winter sports and leisure equipment specialised in the production of ice shing drills. It makes ice shing drills in two sizes: one large ice shing drill (L) and one small ice shing drill (S). In a recent market survey conducted, ICE Ltd saw that sales are expected to increase in 2021. Therefore they have decided to make 250,000 units of L and 200,000 units of S for the 2021-22 winter season. The price of L is 27 and the price of S is 22. The raw material needed for L is 3 kg of steel and for S is 2 kg. The raw material cost is 35 per kg. It takes 15 minutes to make a drill, regardless of size, and the labour cost is 35 per hour. Othg ggsts; Depreciation of machines/ xtures: 600,000 Maintenance (xed cost): 70,000 Other costs of manufacturing: 80,000 The warehouse costs of 100,000 are joint for both products. The sales department has a cost of 300,000 per year. There is also an administrative department whose costs are 950,000 per year. Required: 1. What is the contribution margin for the products L and S? 2. How can the indirect (xed) costs be allocated using the full costing method? What are the allocation bases? 3. What is the ll cost of L and S? Base your calculations on the allocation principle you described in 2). What is the prot/loss per drill type? 4. Describe the main differences between variable costing and full costing. 5. The normal seasonal volume for ICE Ltd is 225,000 units of L and 175,000 units of S. Last year (2020) was a very bad year and they did not produce more than 190,000 units of L and 140,000 units of S due to unseasonably warm temperatures. a. What is the full cost for the products using the normal volume? b. What is the full cost for the products using the historical (actual) volume