Question 2 (10 marks) Erika Sdn Bhd (ESB) produces small electric engines. Identify the following costs as direct materials (DM). direct labor (DL), manufacturing overhead (MOH), or a period cost (PC). Also indicate whether the cost is variable (V) or fixed (F) with respect to behavior. A. Commissions paid to salespeople. B. Straight-line depreciation on the factory building. C. Salary of the plant supervisor. D. Wages of the assembly-line workers. E. Machine lubricant used in production activities. F. Engine casings used in production activities. G. Advertising placed in trade journals. H. Lease payments for the president's automobile. I. Property taxes paid on the factory facilities Question 3 (20 marks) Bolo Company manufactures fishing rods. At the beginning of July, the following information was supplied by its accountant: RM Raw material inventory 40,000 Work in process inventory 21,000 Finished goods inventory 23,200 During July, the direct labour cost was RM43,500, raw material purchases were RM64.000 and total overhead cost was RM100,000. Bolo Company also incurred direct expenses of RM 20,000. The inventories at the end of July were: RM Raw materials inventory 19,800 Work in process inventory 32,500 Finished goods inventory 22,100 For the month of July, 3,500 units of fishing rods was sold for RM150 each. Bolo Company also incurred selling cost of RM80,000 and administration costs of RM 100,000. Required: a) What is the cost of the direct materials used and prime costs for July? b) What is the cost of goods manufactured for july? c) What is the cost of goods sold for July? d) Prepare Income statement for July. END OF QUESTION PAPER