Answer all the parts in detail

Question 2 - Activity Based Costing (20 marks - suggested time 20 minutes) Planet Enterprise produces only two products, gadget and gizmo. The information about the budgeted overhead costs for 2020 is available below. 2020 Estimated Overhead Costs Estimated Overhead Cost Driver Indirect Labour $244,800 Direct Labour Hours Machine Set-Up $58,900 Batches Electricity $145,350 Machine Hours Factory Maintenance $876,950 Factory Space Budgeted Production Gadget Gizmo Units Produced 5,100 10,200 Direct Labour Hours per unit 2 3 Machine Hours per unit 0.5 0.7 Products are produced in a batch of 250. Gadget and Gizmo have to be made in separate batches. Gadget occupies 40% of the factory space. REQUIRED: a. Assume that Planet Enterprise applies overhead cost to products on the basis of direct labour hours. What is the overhead cost allocated to gadget and gizmo respectively. (6 marks) b. Planet Enterprise is considering using activity based costing to allocate its overhead costs. Determine the overhead cost per unit assigned to each product. (12 marks) c. Which method of allocation method would you recommend to Planet Enterprise and why. (2 marks)