Question 2 a) Jobbing Co. prepares the standard cost card for their product called JOP, showing all standard costs and the standard selling price. A single unit of product JOP is made by using of three types of material as follows: 5kgs of direct material A costing $6.00 per kilo, 4 liters of direct material B costing $8.00 per liters and 2 meters of direct material C costing $10.00 per meter. The standard 30%/0 material price for all three types of material mentioned above is expected to increase in price by xinj0 due to high inflation. Two types of labor force are involved in the production of a unit of JOP, which are the skilled labor and general labor. The hourly labor rate of for each type of labor is $90 for skilled labor and $40 for general labor. Twice as many skilled labor hours as general labor hours are needed to produce a unit of product JOP and three ( 3 hours) general labor hours being needed. Direct expenses are estimated to be $32.40 per unit. Variable production overheads_are incurred at the rate of $16.00 per total labor hour. A system of absorption costing is in operation on fixed production overhead costs and basis of absorption is using the total labor hours. The budgeted fixed production overheads are $1,350,000 and the budgeted level of activity is 50,000 units. Selling and distribution overheads costs are added to products at the rate of 10% of standard production costs. A profit margin of 2 dis is made on each unit of JOP that is sold. Discuss FIVE (5) problems encountered in setting standards in a standard costing system. (10 marks)