Question 3 A. The following summary of information extracted from Mendoza Limited, are for a typical month: Total Sales revenue: $102,000 Total Variable costs: $40.000 Fixed costs per month: $54,680 Units sold per month: 2.500 Required: Compute the monthly break-even point in units. [3 marks] (ii) Explain the impact of lowering the selling price and how it will affect Mendoza Limited's breakeven point. [ No calculations are required] [3 marks] B. Explain the meaning of indirect costs. Provide examples for each type of costs. [4 marks] C. Explain what is meant by marginal costing and absorption costing. (4 marks] D. Mendoza Limited has the following total costs for the manufacture of Product MuO over a period of 4 months. Using the high-low method, answer the following questions Month January February March April No. of Units Total Costs ($) 8.000 52.000 3,000 32.020 2.000 28.000 4.100 56,400 Required: () Calculate the variable cost per unit produced [2 marks] (ii) Calculate the fixed cosi portion of the total cost [2 marks] (ii) If the company produces 7 500 units in May, what will be the total cost? [2 marks] (Show all the formulae used and workings to support your final answers] [Total: 20 marks) Page 4 of 10