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1. Double bounce trampolines produce 2 models of backyzed for The original and recently introduced deluxe The deluxe model introduced several safety features that were

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1. Double bounce trampolines produce 2 models of backyzed for The original and recently introduced deluxe The deluxe model introduced several safety features that were intended to scare overly protective parents in to upgrading Since its introduction the deluxe model has increasing its sales, but at the same time the company's profit having declined The CFO believes that the companies traditional costing system may be to blame Currently, the company uses direct labor as the basis for applying overhead The budgeted overheads and direct labore hours for 2020 are OMR 600,000 and 20,000 respectively. The following cast dat is known Original Deluxe Direct materials OMR 50 OMR 75 OMR 30 Direct Labour (OMR 10 per OMR 20 hour) Number of units produced 7.000 units 2.000mts The CFO wishes to explore an activity-based costing system Activity (Cost driver) Estimated Espected Activity (Units) MOH (OMR) Total Standard Deluxe Assembly (Labout 100.000 20.000 14.000 6.000 hours) 200.000 4.000 2.000 2.000 Receiving (Receiving reports) Testing (Number of Tests) 300.000 1.000 800 200 Total overheads 600,000 Required: A Determined the unit cost of each product under traditional costumg method (I Mark) B. Compute the activity rates for each activity under activity-based costing (1 Marks) C Determine the expected unit cost of each product under activaty-based costing (IMark) D. When is the Activity base costing system better than traditional costing system? Give to reasons. (1 mark)

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