5-23ABC, single production process costing, benefits and costs of ABC. John Bradshaw & Bros Ltd. manufactures different plastic toys for kindergartens in Lagos, Nigeria. Details of the toy production budget for the next accounting year are as follows. Note all costs are presented using the currency of Nigeria i.e., Nigerian Naira (NN): Activity Pools Cost Drivers Budgeted Overheads Budgeted Volume Material orders Packaging and handling 12,500 25,500 Number of orders 6,200 Number of 3,750 packaging and handling Number of set-ups 800 Service hours 6,500 Number of checks 3,600 Machine set-ups Service costs Quality control checks Machine costs 10,100 25,400 14,800 40,200 4,000 Number of machine-hours The estimated activities for manufacturing its Transformer toy products for the last financial year are presented here: Required Number/Costs 90 62 Activity Pools Material orders Toy handling Machine set-ups Service time (hours) Quality control checks Machine-hours 34 500 100 2,000 Direct materials costs Direct labor costs N 100,000 N 50,000 N 125,000 Variable overheads 1.Compute the budgeted cost of the Transformer toys using ABC. 2.What are the main reasons why managers at John Bradshaw & Bros Ltd. would consider implementing ABC system? 3.What are the problems that John Bradshaw & Bros Ltd. may face from an activity-based costing system