Question 1.2 (10 marks) Namibia Shoe Manufacturers (NSM) produces handcrafted shoes for the local market using locally obtained skins. The business started as a small family business but has been growing at a steady rate over the years. As part of ensuring continuity, the owner of the business, has hired two managers to ensure the smooth operations of the business as a whole. The production manager is responsible for managing all costs related to the manufacturing process and the marketing and administration manager is responsible for managing all the non- manufacturing costs. The following information has been extracted from NSM for the year ended 2020: Direct materials Direct labour Indirect labour (40% fixed) Variable manufacturing overheads Fixed production overheads Selling and distribution costs (50% fixed) Administration costs (all fixed) N$ 520 000 256 000 190 000 525 000 401 000 204 000 102 000 The company produced and sold 9 800 pairs of shoes in 2020. It is planning to produce 10 000 pairs in 2021 and out of these, 9 900 pairs will be sold. As part of ensuring that responsibilities for cost containment are shared correctly between the managers, you have been given the following task: Requirement 1.2.1 Calculate the following for the year 2020: a) Prime cost b) Variable production cost C Conversion cost d) Total production cost e) Period cost f) Fixed production cost per unit Assuming that the cost behavior and unit costs will not change in 1.2.2 2021 calculate the production cost and period costs for the year 2021. Note: Show all the necessary workings or steps that are required to reach the answer. Marks are available for these. Total Mark Sub- total Total 1 1 1 2 1 3 1 4 1 5 1 6 4 10 10