B A A e Find 02 (20 marks Company Amanufactures a line of high and equipment of commercial quality Assume that the Controller has proposed changing from a traditional costing to an activity based casting system. The Vice-President Finance is not convinced, so she requests that the next large order for equipment be cested under both systems to compare and analyze the company receives and from Sine for 150 low impact treadmills, which the Controller identities the order to use for del costing. The following cont data relate to the Simcorde Data Relevant to Beth Costing Systems Direct materials Direct labour hours Direct labour rate per hour $55.500 20 $18 Data Relevant to the Traditional Costing System: The predetermined overhead rate is 300% of direct labour cost. Data Relevant to the Activity-Based costing System: Activity Cost Pools Cost Drivers Activity-Based Overhead Rate Engineering design Engineering hours $30 per hour Machine set-up Set-ups $200 per set-up Machining Machine hours $25 per hour Assembly Number of sub $8 per sub- assemblies assembly Packaging & Packaging & $15 per hour Shipping hours Building occupancy Machine hours $6 per hour 732 Expected Use of Cost Drivers Per Treadmill 330 22 732 1,450 152 Required: Calculate the total cost of the Slim Inc order under a) The traditional costing system b) The activity-based costing system c) As a result of this comparison which costing System Company A likely to adopt? And why? ly