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QUESTION $1(12$ Marks$)$ Study the information provided below and answer the following questions. Laxson Manufacturers $($LM$)$ is a manufacturing company which produces a range of products. LM has developed a budget for the life cycle of a new product, X$1.$ The information provided below relates exclusively to product X$1$: INFORMATION Lifetime total Per unit Development and design costs R$1900000$ Direct manufacturing costs R$50$ Depreciation costs R$1000000$ Decommissioning costs R$550000$ Machine hours $4$ Production and sales units $300000$ The company$$s total fixed production overheads are budgeted to be R$144$ million each year and total machine hours are budgeted to be $96$ million hours. The company absorbs overheads on a machine hour basis. Required: $1\mathrm{.}1.$Elaborate on the phrase: The company $$absorbs overheads....$(2)1\mathrm{.}2.$Determine the budgeted life$-$cycle cost per unit for product X$1.(5)1\mathrm{.}3.$A cost accountant with considerable experience in Kaizen principles of continuous improvement has estimated that the machine hours per unit can be reduced to $3\mathrm{.}2$ hours if employees are provided training and development on a regular basis. Based on this estimate, the budgeted total fixed production overheads would be revised to R$102$ million each year and budgeted total machine hours to $78$ million hours. Based on the analysis of the cost accountant, the direct manufacturing cost per unit will increase to R$53.$ Production output of $300000$ units will not change. Is this a good idea? Show all calculations.

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