(b) to calculate the total COSES TO E M B LY waseu Lusting Question 12 The Bagus Sangat Sdn Bhd produces three products, A, B and C, all made from the same material. Until now, it has used traditional absorption costing to allocate overheads to its products. The company is now considering an activity based costing system in the hope that it will improve profitability. Information for the three products for the last year is as follows: A B Production and sales volumes (units) 15,000 12,000 18,000 Selling price per unit RM7.50 RM12 RM13 Raw material usage (kg) per unit 3 4 Direct labour hours per unit 0.1 0.15 0.2 Machine hours per unit 0.5 0.7 Number of production runs per annum 12 16 8 Number of purchase orders per annum 24 28 Number of deliveries to retailers per annum 48 30 2 The price for raw materials remained constant throughout the year at RM1.20 per kg. Similarly, the direct labour cost for the whole workforce was RM14-80 per hour. The annual overhead costs were as follows: RM Machine set up costs no production runs 26,550 Machine running costs machine hours. 66,400 Procurement costs no. of purchase order 48,000 Delivery costs no. of deliveris. 54,320 (a) Calculate the full cost per unit for products A, B and C under traditional absorption costing using direct labour hours as the basis for apportionment. (b) Calculate the full cost per unit of each product using activity based costing