Accounting

MST Limited has collected the following data for its two activities. It calculates activity cost rates based on cost driver capacity. Activity Power Quality Inspections Cost Driver Kilowatt hours Number of Inspections Capacity 50,000 kilowatt hours 10,000 Inspections Cost 32,00,000 3,00,000 The company makes three products M, S and T. For the year ended March 31, 20X4, the following consumption of cost drivers was reported: Product Kilowatt hours Quality Inspections M 10,000 3,500 S 20,000 2,500 T 15,000 3,000 Required: (0) Compute the costs allocated to each product from each activity. (ii) Calculate the cost of unused capacity for each activity. (ii) Discuss the factors the management considers in choosing a capacity level to compute the budgeted fixed overhead cost rate