Assignment Question: Printing Ltd manufactures \"printers\". At the 1119mm the business has two types of products on the market, the \"Compact\" and the \"MultiFuuctiou\". In order to remain competitive the business is looking at expanding the range of products in the next 12 months. The company currently uses a traditional costing system and allocates overhead costs based on an estimated 83,200 direct labour hours. The following cost information has been used as a basis for pricing decisions over the past year. The company has produced a total of 145,000 units, 60% are of the Compact and 40% are of the Multi-function. Perunit data Compact Multi function Direct labour hours 1.80 3.50 Direct labour cost per hour $16 $18 Direct materials $75 $55 Direct machine hours 5 1.5 Selling Price $180 $120 The recent cost report for the business shows that the ratio of prime costs to manufacturing overhead cost is approximately 1:3. The new Management Accountant Ms Andi is considering the use of Activity Based Costing to apply overhead and has collected some data (see below) but requires your assistance: Number of Events Activity Cost 111" 11 e1 Traceahle Compact MU]!! costs $ functlon $50000 150 50 _ 0002 000 000 000 _ 0000 000 00,000 00,000 '3 '3 $150 000 1000 3,000 Note: (where necessary round off answer to 2 decimal places). ALL workings must be shown for each part. SECTION A Reguii'cnients, to he completed in EXCEL. A.Given the rst paragraph sets the scene surrounding the industry the company fits into and the products it manufactures. you now need to think about what type of activities would be involved in making these products and what drives these activities to occur. Complete the yellow shaded sections of the table above. B. Using the traditional costing system. calculate the company's predetermined overhead rate. C. Calculate the total product cost per unit for both products [Compact and Multi-function) using the traditional overhead allocation rate calculated in part (a). D. Calculate the overhead activity rate for each activity centre using the Activity Based Costing (ABC) approach E. Using an Activity Based Costing (ABC) approach calculate the total product costs of one unit of Compact and one unit of Multi-function. F. Calculate the operating profit per unit for the Compact and Multi-function under. 1. The traditional costing system and 2. The ABC system SECTION B Re nil'ements to be com leted in Microsoft word document. G. Explain the activities and the cost drivers you selected in part A of Section A. Explain, why you feel they are appropriate for this business? H. Examining the gures you calculated in section A (Part B 85 Part E}. Discuss why the unit cost for the Compact 8:. the Multifunction are different under the two techniques used. I. Explain to the management accountant whether this business should or should not move towards an ABC system. J. What type of company would best suit the features of a Hybrid costing system. Explain and provide examples