Anfield Ltd makes two similar products, the Kemlyn and the Kop the Kemlyn is a basic version, the Kop is a premium version, and information relating to each of these products is set out below.

	Kemlyn	Kop
Selling price per unit	90	180
Annual sales volume	9,000 units	24,000 units
Number of sales invoices issued each year	800	350
Labour time per unit	3 hours	6 hours
Labour rate per unit	15	15
Material cost per unit	35	40
Size of each production batch	1000	500
Bought in parts per unit	2	1
Machine set-ups per batch	5	10

Anfield Ltd would like to move from their traditional absorption costing approach to an activity based costing (ABC) approach. The Finance Director at Anfield Ltd has recently produced the following analysis of overheads and their relevant cost drivers.

Type of overhead	Cost driver
Bought in parts handling costs	Number of bought in parts	147,000
Materials handling costs	Number of production batches	45,600
Sales invoicing costs	Number of invoices issued	63,250
Machine set-up costs	Number of machine set-ups	31,500
All other overheads	Labour hours	85,500
Total overhead costs		372,850

Required

1. Calculate the total cost per unit and profit or loss per unit for each product using an activity-based costing method. (16 marks)

2. Advise the Finance Director on what actions should be taken following your ABC analysis of the Kemlyn and Kop products. (4 marks)