791.5 (Contrasting Traditional and ABC Costing) Brixton Industries makes three products widgets.gadgets, and helios. The following budget information relates to Brixton for next year, Sales and production (units) Selling price (per unit) Direct labour and materials (per unit) Machine hours per unit in Machining Dept. Direct labour hours per unit in Assembly Dept Widgets 50,000 545 $32 2 7 Gadgets Helios 40,000 30,000 $95 584 5 4 3 2 573 565 Overhead is allocated to production departments as follows Machining Department at $120 per machine hour Assembly Department at $0.825 per direct labour hour However, you have determined that the overheads could be reanalyzed into cout pools as shown below . Cost pool Machining services Assembly services Set-up Order processing Purchasing Cost (5) 357.000 318,000 26,000 156,000 84.000 Cost Driver Machine hours Direct labour hours Set-ups Customer orders Supplier orders Quantity 420,000 530,000 520 32.000 11.200 You have also been provided with the following estimates for the current accounting period Widgets Gadgets Helios Number of set-ups 120 200 200 Customer orders 8.000 8.000 16,000 Supplier orders 3.000 4.000 4.200 a. Prepare a report showing profitability for each product for the next year using the traditional overhead allocation method b. Prepare a report showing profitability for each product using activity based costing c. Explain the differences between the products proftability using traditional and activity-based costing