1. What are the costs (direct material, direct labour and overhead) for each of the two representative types of soap using direct labour cost as the allocation base for the allocation of overhead? Show your calculations to justify your answer

2. What are the costs (of direct material, direct labour, and overhead) for each of the two representative types of soap using an ABC approach for the allocation of manufacturing costs? Show your calculations to justify your answer.

ABC approach? Explam - EXHIBIT 1 - COSTS FOR ONE MONTH'S PRODUCTION OF SOAP Costs per 100 g Soap Cost Components Total Industrial Soap (Hospital) Luxury Soap (Hotel) $0.80 $0.40 $0.60 $0.10 $0.15 $0.14 Direct materials Packaging Direct labour Manufacturing Processing Finishing Packaging $4,000,000 $2,000,000 $ 750,000 $5,000,000 $2,500,000 $1,500,000 $1,000,000 EXHIBIT 2 - TIME REQUIRED FOR ONE MONTH'S PRODUCTION OF SOAP Time Components Total Time per 100 g Soap Industrial Soap (Hospital) Luxury Soap (Hotel) Processing 750,000 seconds 0.2 second 0.4 second Finishing 300,000 seconds 0.03 second 0.4 second Packaging 100,000 seconds 0.006 second 0.5 second