Question 4 (10 Marks) Mike. Inc has two products A and B. The budgeted fixed manufacturing overhead is $10,000. The department is expected to work in full capacity. It plans to use cost-based pricing by using the absorption method. Assume the firm can produce and sell 1,000 units Product A and 1,000 units Product B. Product A Product B Direct Materials $3 $2 Direct Labor $1 $3 Variable Manufacturing Overhead $2 $1 Budgeted labor hours used for each unit product 1 4 Budgeted machine hours used for each unit product 3 Sale Demand 1,000 1,000 Product A Product B Required Investment $5,000 $30,00 Required ROI Rate 10.00% 5.00% Unit Variable Selling Expenses $1 $2 Fixed Selling Expenses $2,000 $4,000 Required: a. If allocating fixed manufacturing overhead based on direct labor hour basis, calculate the sale price of products A and B and budgeted profit of products A and B. (4 Marks) b. If allocating fixed manufacturing overhead based on machine hour basis, calculate the sale price of products A and B and budgeted profit of products A and B. (4 Marks) c. Due to the COVID-19 outbreak, the company anticipates a large decrease in sales in 2021. Without preparing income statements, please discuss which product can bring higher net income to the firm and explain why. (Word limit: 100) (2 Marks)