2. A company makes three main products, using broadly the same production methods and equipment for each. A conventional product costing system is used at present, although an activity-based costing (ABC) system is being considered. Details of the three products for a typical period are: Labour Hours Machine Material Volume hours Kgs in per unit per unit per unit units 0.1 0.5 2 15000 Product A Product B Product C 0.15 0.7 3 12,000 0.2 0.9 4 18,000 Direct labour costs per hour are Rs.: - 14.8 Material costs per metric ton are Rs.:- 1200 Costs relating to set-up Costs relating to machinery running Costs relating to material procurement Costs relating to deliveries 26550 66400 48000 54320 Deliveries Product A Product B Product C Production Purchase Runs Orders 16 24 12 28 8 42 48 30 62 Calculate Cost Per Unit of each product using (a) labour cost based traditional method and (b) ABC method. Also comment upon how ABC may help in improving product profitability