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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

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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 N$ Direct materials Direct labour Indirect labour (40% fixed) Variable manufacturing overheads Fixed production overheads Selling and distribution costs (50% fixed) Administration costs (all fixed) 520 000 256 000 190 000 525 000 401 000 204 000 102 000 I 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

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