Niko Company produce and sell a single product called Mac. The product is sold at RM32 per unit and the normal production level of the product is 60,000 units each year. The company's total cost at this level of activity are given below: Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost RM 600,000 270,000 138,000 300.000 72,000 210,000 1,590,000 Note: Each question is independent. Required: a. Due to the outbreak of Covid-19 and the implementation of total lockdown in supplier's place, Niko Company is unable to purchase more material for the production of Mac. The total lockdown is expected to last for two months. Currently, Niko Company has materials on hand that enough to produce only 30% of the normal production level for the two months period. The production manager of Niko Company has suggested to close down the company's plant for the two months because if the plant were closed, fixed manufacturing overhead costs would reduce by 40% from its normal level during the two-month period. The fixed selling expenses would also be reduced by 20%. Evaluate the impact on profit of closing plant for the two-month period of the company (assuming the company manages to sell all unit produced during the two months period). (10 marks) b. Niko Company has received an offer from an outside manufacturer to produce Mac at cost RM22 per unit. If Niko Company accepts this offer, the facilities that being used to produce Mac would have no alternative uses. However, fixed manufacturing overhead costs would be reduced by 75%. Besides, one-third of the variable selling expenses could be eliminated because the outside manufacturer would pay for all shipping costs. The outside manufacturer will deliver the product directly to Niko's customers. Advise Niko Company on whether to accept or reject the outside manufacturer's offer. (5 mart