The production division of Dreadnought Ltd produces engines for garden tools at the following standard costs per engine. RM 18.00 8.00 17.00 Total Cost per engine 43.00 Materials Labour Overhead The standard labour rate is RM16 per hour. Fixed Overhead is absorbed at a rate of RM20 per labour hour. The remaining overhead is variable. The division is operating at 90% annual capacity of 12,500 labour hours. 60% of the division's output is sold internally to the assembly division of the company at a transfer price of RM50 per engine. The remaining output is sold externally at a price of RM60 per engine (extra variable costs of RM3 per engine are incurred for these sales). The assembly division will further incur the following cost: Materials Labour Overhead Selling I Assembly division can sell the products to external market at RM80 per unit. The above costs are calculated at production units of 15,000 units. Assembly division buys the remaining units from external supplier at RM45 per engine. Currently, assembly has proposed to company to adopt full purchase from external supplier. If it were to lose its internal sales, the production division feels it could only increase external sales to double the current level and that these additional sales would be at the lower price of RM55 per engine. The company's central management is concerned about the financial implications of this change. Required: (a) Prepare profit statement for each division and company overall under current situation. (b) Prepare revised profit statement for each division and company overall if Assembly divisions buys all units from external supplier. (c) Company is suggesting the following 2 solutions With maximum capacity, production division will sell the remaining outputs to assembly at full cost transfer price after maximizing its external market. With maximum capacity, production division will transfer all required demand at market price as transfer price and remaining outputs to external market. Advise the company which solution is can be used to solve the above matter. (d) i RM 5.00 7.00 8.00 (50% Variable and 50% fixed) 2.00 11.