Question 3. You have gone through the activities for the last year, 2022, and found that AMT rents a small administrative office in Seaford for $24,000 per year in addition to the manufacturing plant which costs $60,000 per year. William agreed to pay the annual salary of $50,000 to you as an accountant but you need to handle some administrative work as well. In addition to you, there is a sales manager who is paid an annual fixed salary of $30,000 plus a commission of $50 for each outboard motor sold. The miscellaneous cost incurred in the administrative office was $5,000 per year and this cost is expected to remain the same amount for years to come. In the manufacturing plant, there is a full-time supervisor who gets paid $75,000 per year for supervising the production and the casual staff. The machine maintenance cost is $10,000 per year and another factory- related miscellaneous cost is $5,000 per year. These costs are expected to remain the same amount for yea rs to come. AMT has a contract with a delivery firm for delivering motors to their outdoor adventure retailers. The delivery is arranged only once a month to all the retailers. The delivery information and costs for the last 6 months are as follows: Table 1: Delivery cost and units Month Motors delivered Delivery costs Decem ber 50 $2200 November October 20 $1200 September In the last year (2022), AMT has manufactured 500 outboard motors, and the material costs incurred in the last year are given in Table 2. There was no opening inventory, work-in-process inventory, or finished goods but there were 50 motors (finished goods) remaining at the end of the last year. https://www.cimaglobal.com/Professionalism/Ethics/CIMA-code-of-ethics-for-professional-accountants/ 5 Table 2: Material quantity and cost Materials Quantity Total cost Aluminium alloy 2000 m2 $2000 Cylinder head & block 500 $25,000 Motor engine 500 $62,000 Bottom cowling 500 $12,500 Lower unit and propellor 500 $17,500 Copper cable 2000 meters $500 Electric unit and harness 500 $25,000 Nut and bolt 5,000 units $1,000Casual staff handling all manufacturing processes. In the first phase, machine operators are manufacturing certain parts and it takes 1 hour to manufacture parts per motor. Machine operators are paid $40 per hour. In the assembling section, staff assembled the powerhead, midsection, and lower unit. This task is very labour intensive, and it takes 2 hours per motor, and staff is paid $30 per hour. Once the assembling is done, then pass to the electrical team to do wiring and testing. It takes 0.5 hours per motor and electricians are paid $50 per hour. Required: a). William and Oliver are having no clue about these numbers and costs and asked you to classify all the costs between (a) fixed, mixed or variable, (b) direct or indirect, and (c) product or periodic costs. Use the table given below to present the answer to this part. (Chapter 2, 12 marks) m Fixed, mixed, or variable cost Direct or indirect cost Product or period cost [cost item #11 [costitem #2] [costitem #31 b). Use the high-low method to estimate the cost function for annual delivery costs. (Chapter 9, 8 marks) c). Calculate the total manufacturing cost for the last year and manufacturing cost per motor. (Chapter 2, 5 marks)