Question 3 a) Top-pride Co. prepares the standard cost card for their product called FAITH, showing all standard costs and the standard selling price. A single unit of product FAITH is made by using of three types of material as follows: - 6 kg of direct material F, costing $13.00 per kg -8 liters of direct material A, costing $9.00 per liter -4 meters of direct material H, costing $12.00 per meter The standard material prices for all three types of material mentioned above is expected to increase in price by 10% due to better quality material bought, which will result in a 5% reduction in the quantity of material to be used for production. A customized component called Component FH will be needed and it will cost $43.09 per unit. Two types of labor force are involved in the production of a unit of FAITH, which are the skilled labor and unskilled labor. The hourly labor rate of for each type of labor is $80 for skilled labor and $20 for unskilled labor. Thrice as many unskilled labor hours as skilled labor hours are needed to produce a unit of product FAITH and two (2) hours of skilled labor hours is needed. Variable production overheads are incurred at the rate of $30.00 per total labor hours. A system of absorption costing is in operation for the fixed production overhead costs and basis of absorption is using the total labor hours (skilled and unskilled hours). The budgeted fixed production overheads are $9,200,000 and the budgeted level of activity is 40,000 units. Selling and distribution overheads costs are added to products at the rate of 10% of standard production costs. A profit margin of 20% is made on each unit of FAITH that is sold. Required: Prepare the standard cost card for the above information for each unit of FAITH product. (15 marks) b) Setting standards of performance in any organization is not an easy task because it has to be motivational and agreeable by both the employees and employer. In view of this discuss FOUR (4) problems encountered when setting standards of performance in any organization. (10 marks) (Total: 25 marks)