Sinha Limited manufactures two types of products, namely, Product X and Product Y. Cost data for the products are given below: Prod X Prod Y Total costs ($) ($) ($) Variable costs per unit Direct material Direct labour Variable manufacturing overhead Variable selling and administration Total variable cost per unit 8.00 10.00 7.00 3.00 28.00 15.50 16.00 8.50 3.00 43.00 Fixed costs per month Fixed manufacturing overhead Fixed selling and administration Total fixed cost per month 735 000 630 000 1 365 000 The production of both Product X and Product Y uses the same laborers that are paid $120 per hour. It takes 5 minutes of direct labor time to produce Product X whereas it takes 8 minutes of direct labor time to produce Product Y. Fixed manufacturing overheads are allocated between the two products using labor hours. Sinha Limited sets the selling price of its products at the cost of production plus eighty percent mark- up. The company's production level has been the same for the past couple of months. The financial manager of Sinha Limited provided you with the following inventory information (in units of a product) for the month of 31 August 2010 based on the information collected from the production and sales managers: Product X Product Y Number of products on 1 August 2010 Number of products produced during the month of August 2010 Number of products sold during the month of August 2010 Number of products on 31 August 2010 2 500 15 000 14 800 2 700 1 500 9 000 10 200 300 The financial manager has also prepared an absorption costing income statement for the month ended 31 August 2010 as presented below: Amounts are in $ August Sales 2 800 800 Cost of sales (1 556 000) Gross profit 1 244 800 Selling and administration expenses (705 000) Operating profit 539 800 (a) Calculate the unit selling price for each of the two products manufactured by Sinha Limited. (b) Critically evaluate the allocation of fixed manufacturing overheads between the two products and make recommendation for improvement (if any) for Sinha Limited. (c) Calculate the profit which Sinha Limited earned for the month ended 31 August 2010 based on the variable costing system (i.e. marginal costing method) AND comment on the difference in profit (if any) if the absorption costing system is used. (d) Determine the breakeven units for Sinha Limited for its two products at the current sales-mix