Question 3 The Desert Oasis Company is a manufacturer of clothing that sells its output directly to clothing retailers. One of its departments manufactures t-shirts. The department has a production capacity of 50,000 t-shirts per month. Because of the liquidation of one of its major customers, the company has excess capacity. For the next quarter, current monthly production and sales volume is expecte to be 35,000 t-shirts at selling price of RM40 per t-shirt. Expected costs and revenues for month at an activity level of 35,000 t-shirts are as follows: RM Direct labour 420,000 Direct materials 280,000 8