SECTION A [100 Marks ] Answer ALL questions in this section. Question 1 (6 Marks) Entity Z is trying to obtain a cost estimate for the costs of repairs. The following monthly repair costs have been recorded for the past six months. Month machines repaired Cost of repairs R 38 31,000 41 32,700 25 26.500 OUT A WN - 21 23,600 36 29,900 32 28,900 Required: Use high/low analysis to estimate the fixed costs of repairs each month and the variable cost per machine repaired. Estimate the expected costs of repairs in a month when 30 machines are repaired. Question 2 (10 Marks) A company uses 15,000 units of stock item 6786 each year. The item has a purchase cost of R4 per unit. The cost of placing an order for re-supply is R220. The annual holding cost of one unit of the item is 10% of its purchase cost. Data relating to stores item 6787 are as follows. Daily use: 300 Units Lead time for re-supply: 5 -20 Days Reorder quantity: 10,000 Units Required: What is the economic order quantity for item 6786, to the nearest unit? What would be the effect of an increase in the annual holding cost per unit on (1) the EOQ and (2) total annual ordering costs? iii What should be the reorder level for this stock item (6787), to avoid the possibility of inventory-outs