QUESTION 3 Part A Premium Cha Co. manufactures high-quality porcelain tea sets. The company plans to introduce its new tea set - Golden; next year. The following cost information pertains to the budgeted production and sales of 10,000 sets of Golden: Direct materials per set (2 kg at RM30 per kg) Direct labour per set (2 hours at RM10 per hour) Variable selling and administrative cost per set RM60.00 RM20.00 RM6.00 Manufacturing overhead rate: Variable RM8 per direct labour hour Fixed RM12 per direct labour hour Fixed selling and administrative costs RM20,000 The company is contemplating what price to charge for Golden. Currently, there is a comparable tea set in the market, which sells for RM145 per set. Required: a. Compute the break-even price of Golden. (2 marks) b. Suppose the company uses cost-plus pricing method to price Golden. Determine whether the unit selling price of Golden meets the competitive sales price if the company desires: a. 25% mark-up on absorption cost. b. b. 20% mark-up on total cost. (6 marks) c. Suppose the company uses target costing and desires to meet the competitive sales price. a. Determine the unit cost of Golden at the competitive sales price while maintaining the same percentage of profit on sales as is earned in Requirement 2(a). b. b. Would the current cost of the company meet the target cost? Explain