A. Syarikat Bertahta Indah manufactures and sells three styles of kitchen sinks: Stainless Steel, Granite, and Nano. Normal production takes 25, 25, and 10 machine hours to manufacture a 1000-unit batch of stainless steel, granite, and nano sinks, respectively. The following additional data apply for 2020 operation: Granite Nano Stainless Steel 30,000 50,000 40,000 RM RM RM 40 8 15 20 4 3 30 8 9 Projected sales in units Per Unit data: Selling price Direct materials Direct labor Overhead cost based on direct labor hours (traditional system) Hours per batch: Direct labor hours Machine hours Setup hours Inspection hours 12 3 9 Hours Hours Hours 40 25 1.0 30 10 25 0.5 20 30 10 1.0 20 Total overhead costs and activity levels for the year are estimated as follows: Overhead costs Activity Direct labor hours Machine hours Setups Inspections Activity levels 2,900 hours 2,400 hours 95 setup hours 2,700 inspection hours RM465,500 RM405,000 RM870,500 REQUIRED: (a) Determine the operating profit per unit for each style of sinks by using the traditional system. (8 Marks) (b) Determine the activity-cost-driver rate for setup costs and inspection costs. (4 Marks) (c) Compute for each style of sinks using Activity Based Costing System (ABC): (i) The estimated overhead costs per unit (12 Marks) (ii) The estimated operating profit per unit (6 Marks) (d) Compare the differences between the profits obtained from the traditional system and the ABC system. Analyze which system provides a better estimate of profitability and give your justifications. (8 Marks) B. Humane Electronics Bhd (HE) produces specialized product that relates to pre-school gaming and mobile surveillance. At HE, product lines are charged for call center support costs based on sales revenue. Last year's summary of call center operations revealed the following: Pre-School Gaming Number of calls for information Average call length for information Number of calls for warranties Average call length for warranties Sales revenue Mobile- Surveillance Products 1,000 3 minutes 300 7 minutes RM8,000,000 4,000 8 minutes 1,200 15 minutes RM5,000,000 HE currently allocates call center support costs using a rate of 0.5% of sales revenue. REQUIRED: (a) Compute the amount of call center support costs allocated to each product line under the current system. (3 Marks) (b) Assume HE decides to use the average call length for information to assign last year's support costs. Does this allocation basis seem more appropriate than the percentage of sales? Why or why not? (3 Marks) (c) Assume HE decides to use the number of calls for information and for warranties to assign last year's support costs of RM65,000. Compute the amount of call center support costs assigned to each product line under this revised ABC system. (6 Marks) 2