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: $54,560 Units sold per month: 2,500 Required: (i) Compute the monthly break-even point in units. [3 marks] (ii) Explain the impact of lowering the selling price and how it will affect Mendoza Limited's breakeven point. [No calculations are required] [3 marks] B. Explain the meaning of indirect costs. Provide examples for each type of [4 marks] costs. C. Explain what is meant by marginal costing and absorption costing. [4 marks] D. Mendoza Limited has the following total costs for the manufacture of Product MuO over a period of 4 months. Using the high-low method, answer the following questions. No. of Units Total Costs ($) Month January 8,000 52,000 February 3,000 32,020 March 2,000 28,000 April 4,100 36,400 Required: (i) Calculate the variable cost per unit produced. (ii) Calculate the fixed cost portion of the total cost [2 marks] [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] DELL Page 4 of 10 W