Question two (a) Kenya Auto Assemblers Ltd assembles cars from imported knocked-down-kits. The company has been operating at 60% capacity, assembling 3,000 cars per year. Level of activity Costs 60% 80% Sh ,,000" Sh ,000" Direct materials 600,000 800,000 Direct labour 150,000 200,000 Indirect labour 200,000 240,000 Factory fuel and power 10,000 130,000 Factory repairs 130,000 155,000 Total cost 1,180,00 1,525,000 Required: (1) Using the high-low method, establish the cost equations of the for y = a +bx for each of the following costs for the company. 1. Direct materials (2 marks) 2. Direct labour. (2 marks) 3. Indirect labour. (2 marks) 4. Factory fuel and power. (2 marks) 5. Factory repairs. (2 marks) (ii) Using the results obtained in (i) above, estimate the total costs at 120% level of operation showing clearly the variable and fixed components of mixed costs. (2 marks)