already I have answer for section (A) the answer below problem

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Question:

Frantic Plc assembles three types of motorcycle at the same factory: the 50cc Sunshine; the 250cc Roadster and the 1000cc Fireball. It sells the motorcycles throughout the world.

In response to market pressures Frantic Plc has invested heavily in new manufacturing technology in recent years and, as a result, has significantly reduced the size of its workforce.

Historically, the company has allocated all overhead costs using total direct labour hours but is now considering introducing Activity Based Costing (ABC). Frantic Plcs accountant has produced the following analysis.

Required

1. Calculate the total profit on each of Frantic plc three types of product using each of the following methods to attribute overheads:

1. The existing method based upon labour hours.
2. Activity based costing. (50 marks)

Note: Please show and explain all your workings clearly

[Maximum Word Count 500 words]

2. Write a report to the directors of Frantic Plc, as its management accountant. The report should:

1. Evaluate the labour hours and the activity-based costing methods in the circumstances of Frantic Plc; and (30 marks)

[Maximum Word Count 750 Words]

2. Examine the implications of activity-based costing for Frantic Plc, and in so doing evaluate the issues raised by each of the directors.

[Maximum Word Count 750 Words]

this answer for SECTION ( A)

1. Calculation of Total overheads

Overheads	$
A. Deliveries to Retailers	2400000
B. Set-up Costs	6000000
C. Purchase Orders	3600000
Total Overheads (A + B + C)	12000000

2. Calculation of Total Annual Direct Labor Hours

	Labor Hours
A. Fast	200000
B. Quikie	220000
C. Zoom	80000
Total Labor Hours (A + B + C)	500000

Pre-determined Overhead Rate = Total Overhead / Total Direct Labor Hours

= $12000000 / 500000 Direct Labor Hours

= $24 per Direct Labor Hour

3. Profitability Statement under the existing method based upon Labor Hours

	Fast	Quikie	Zoom
A. Sales ($)	8000000	9600000	3200000
	(2000 units * $4000)	(1600 units * $6000)	(400 units * $8000)
B. Raw Materials Cost ($)	800000	960000	360000
	(2000 units * $400)	(1600 units * $600)	(400 units * $900)
C. Direct Labor Cost ($ 5 per hour)	1000000	1100000	400000
	(200000 hours * $5)	(220000 hours * $5)	(80000 hours * $5)
D. Overhead Cost ($24 per Direct Labor Hour)	4800000	5280000	1920000
	(200000 hours * $24)	(220000 hours * $24)	(80000 hours * $24)
E. Total Cost ($) (B + C + D)	6600000	7340000	2680000
F. Profit ($) (A - E)	1400000	2260000	520000

4. Computation of ABC (Activity Based Costing) recovery rates

Activity	Activity cost pool ($)	Cost driver	Number of activities	Cost per activity ($)
(a)	(b)	( c)	(d)	( e)= (b)/(d)
Deliveries to Retailers	2400000	Number of deliveries to retailers	250	9600
			(100 + 80 + 70)
Set-up Costs	6000000	Number of set-ups	100	60000
			(35 + 40 + 25)
Purchase Orders	3600000	Number of purchase orders	800	4500
			(400 + 300 + 100)

5. Profitability Statement using Activity Based Costing (ABC) Method

	Fast	Quikie	Zoom
A. Sales ($)	8000000	9600000	3200000
	(2000 units * $4000)	(1600 units * $6000)	(400 units * $8000)
B. Raw Materials Cost ($)	800000	960000	360000
	(2000 units * $400)	(1600 units * $600)	(400 units * $900)
C. Direct Labor Cost ($ 5 per hour)	1000000	1100000	400000
	(200000 hours * $5)	(220000 hours * $5)	(80000 hours * $5)
D. Overhead Cost
Deliveries to Retailers Cost	960000	768000	672000
	($9600 * 100)	($9600 * 80)	($9600 * 70)
Set-ups Cost	2100000	2400000	1500000
	($60000 * 35)	($60000 * 40)	($60000 * 25)
Purchase Orders Cost	1800000	1350000	450000
	($4500 * 400)	($4500 * 300)	($4500 * 100)
E. Total Costs ($) (B + C + D)	6660000	6578000	3382000
F. Profit ($) (A - E)	1340000	3022000	-182000