QUESTION FOUR KAPPA Lid produces product WYUE KAPPA Lidhatnanci year that ends on 31 December For the year ending 31 December 200, the pro budited production volume of produc WYME I 19,000 units. The forecastination level for the year ending 31 December 2020 measured by the average price index 125 Production cost comprise direct e production costs and semi-variable production overheads Direct variable costs of production per unit of the product inbase year terms are as follows Direct materials 12.50 Direct labour 4.20 Direct expenses Semi-variable production overheads for the past five years have been as follows: Year Production volume Total Cost Price Level Index 320 2015 30,000 440.000 100 2016 81,000 497,280 2017 78,000 487 600 115 2018 88.000 561.6801 2019 70,000 518 400 Required: al Explain what is meant by cost behaviour and explain why management must know the behaviour of costs in KAPPA Lid [4 Marks] (h) Using the high-low method, analyse the semi-variable costs into the variable cost per unit and the fixed cost per annum in base your terms 16 Marks] (c) Calculate the total budgeted production cost per unit of product WYME for the year ending 31 December 2020 showing the unit cost for each element of cost. 18 Marks] (d) Explain the relevance of classifying costs by element of cost for the purposes of determining costs of products [4 Marks] [TOTAL: 20 MARKS] endered 19 to uno Page 5 of 6