Thohoyandou Limlted operate\& a system of fexible budgets and the fiexed budgets for expenditure for the first two quarters of 204 were as follows: 1 and 2 Despite a projected increase in activity levels, the cost structures in quarters 1 and 2 are expected to continue during quarter 3 of 204 as follows: (a) The variable cost elements behave in a linear fashion in direct proportion to volume. However, for production output in excess of 28000 units the unit variable cost for production labour increases by 50 per cent. This is due to a requirement for overtime working and the extra amount is payable only on the production above 28000 units. (b) The fixed cost elements are not affected by changes in activity levels. (c) The variable elements of production costs are directly related to production volume. (d) The variable element of selling and distribution overhead is directly related to sales volume. Required: 51. Using the high - low method, determine the cost behaviours (i.e, the variable costs per unit and fixed (10 marks) costs) of each of the five cost items shown in the flexed budgets for quarters 1 and 2 of 204. 52. Based on the cost behaviours determined in 51 , prepare a statement of the budget cost allowances for (10 marks) quarter 3 of 204, based on sales volume of 29000 units and production volume of 30000 units