2 of 5 QUESTION 2 For the company: TPC = DM + DL + OH applied on DLH + machine hours required Company usually use the traditional method of allocating overhead costs to each product Product Product B Product 200 300 Production Units Direct Materials $100 per unit 500 $100 per unit $5 per DLH 5 $100 per unit $ $5 per DLH Direct Labour Costs $5 per DLH DLH required 100 hours 250 hours 150 hours Machine Hour Costs $10 per DLH $10 per DLH $ 200 $10 per DLH 300 MH required 500 Company plans to use the ABC method to allocate the overhead costs instead. Cost Drivers Activity Cost Pool Overhead Costs ($) Product A Product B Product Setup (setup) $2,000 25 50 25 2 5 3 Procurement (POS) Assembly (MH) $1,000 $10,000 200 500 300 Delivery (packs) $5,000 25 50 25 Required: a) Determine the total manufacturing costs per unit for each product using the: 6) traditional costing method (ii) activity-based costing method b) Comment on the effect of different methods on the profitability of the products. QUESTION 3 QUESTION 3