Question 3 Tan Pte Ltd ("TPL") produces a single product called TO1. The product uses material sourced from Europe. The company has sufficient capacity to produce 80,000 units of TO1 each month, without the need to increase fixed manufacturing overhead costs. It normally produces and sells 70,000 TO1 each month at a selling price of $199 per unit. The company's unit costs at this level of activity are given below. Fixed manufacturing costs are allocated on the basis of production volume. Product costs Per unit ($) Direct material 100.00 Direct labour 44.50 Variable manufacturing overhead 2.30 Fixed manufacturing overhead 5.00 Variable selling expenses 1.70 Fixed selling expenses 3.50 Total cost per unit $157.00