Question #3: (22 marks) Oxwood Company is a metal- and wood-cutting manufacturer selling products to the home construction market. Consider the following data for the year 2019; $ Sandpaper Materials handling costs Lubricants handling process Miscellaneous indirect manufacturing labour Direct manufacturing labour Direct materials (as at January 1,2019) Direct materials (as at December 31,2019) Finished goods (as at January 1,2019) Finished goods (as at December 31,2019) Work in process (as at January 1, 2019) Work in process (as at December 31, 2019) Plant leasing costs Amortization . plant equipment Property tax on plant equipment Fire and casualty insurance on plant equipment Direct materials purchased in 2019 Revenue Marketing and promotion Marketing salaries Shipping costs Customer service costs General administration 2.000 70,000 5,000 40,000 300,000 40,000 50,000 100,000 150,000 10,000 14,000 54,000 36,000 4,000 3,000 460,000 1,360,000 60,000 100,000 70,000 100,000 27,000 Required: a. Prepare an income statement with a separate supporting schedule of cost of goods manufactured. For all manufacturing items indicate by a V or whether each is basically a variable cost or a fixed cost (where the cost object is a product unit). If in doubt, decide on the basis of whether the total cost will change substantially over a wide range of production output. (14 marks) b. Suppose that both the direct materials and plant leasing costs are tied to the production of 900,000 units. What is the direct material cost assigned to each output unit produced? Assume that the plant leasing costs are a fixed cost. What is the unit cost of the plant leasing costs? (2 marks) C. Repeat the computation in requirement 2 for direct materials and plant leasing costs if the costs are being predicted for the manufacturing of 1 million units next year. Assume no changes in the historical or actual cost behaviour patterns (2 marks) d. As a management consultant explain concisely to the President why the direct materials cost per output unit did not change in requirements 2 and 3 but the plant leasing costs per output unit did change. (4 marks)