Annual (units) output Annual labour Hours Question 2 (25 points) A car manufacturer assembles three types of cars at the same factory: Sedan1; Suv2 and Cross3. material direct Selling price ($ Raw per unit) cost ($ per unit) Sedan1 2000 200000 17500 2600 Suv2 1800 180000 25200 4500 Cross3 1200 150000 35000 5300 The three cost drivers that generate overheads are: Deliveries to retailers - the number of deliveries of motorcycles to retail showroom Set-ups - the number of set ups Purchase orders the number of purchase orders. The annual cost driver volumes relating to each activity and for each type of motorcycle: Number of deliveries Sedan1 Suv2 40 50 Cross3 35 Number of set ups Number of purchase orders 100 400 80 300 70 200 The annual overhead costs relating to these activities are as follows: Deliveries to retailers $1 150 000 Set-up costs $252 000 Purchase orders $140 000. All direct labour is paid at $8 per hour. The company holds no inventories. Calculate the total profit on each product using each of the following methods to attribute overheads: (i) the existing method based upon labour hours; (ii) activity based costing.