ABC ltd is a circuit board producer and produces two products, L1 & L2. The company currently uses traditional costing system for making business decisions. However, recently the company is considering a move towards the Activity-Based Costing (ABC) system. As one of the companys accountants you have been asked to prepare a statement comparing both the costing methods for the next company board meeting. Your supervisor has given you the following quarterly data: -

Total Indirect Costs for the quarter:

Assembly RM630,000 Soldering RM270,000 Inspection RM160,000

L1 L2

Direct costs (materials, labour) RM162,400 RM178,240

Machine hours (assembly) 480 1,080

Number of units produced (soldering) 6,000 4,000

Testing hours (inspection) 6,000 8,000

In the traditional system, the Inspection department (support department) and its costs were shared by the Assembly and Soldering departments (production departments) i.e. 60% cost allocated to Assembly and 40% cost allocated to Soldering.

Under the traditional system, calculate the following: Manufacturing cost per unit for L1 and L2

L1 RM97.697; L2 RM203.614

L1 RM203.614; L2 RM97.697

L1 RM200,400; L2 RM133.600

None of the above