Baldu Biru manufactures two musical instruments, clarinet and flute. A review of the company's accounting records revealed the direct cost per-unit and production volumes: Production volume (units) Direct material Direct labour: 2 hours at RM150.00 3 hours at RM150.00 Instrument Clarinet 2,500 RM400 RM300 Instrument Flute 5,000 RM600 RM450 Manufacturing overhead is currently computed by spreading overhead of RM1,860,000 over 20,000 direct labour hours. Management is considering a shift to activity-based costing in an effort to improve the firm's competitive position, and the following data are gathered: Cost pool Set up General Amount (RM) 240,000 Cost driver Number of setup Clarinet Flute Total 100 20 120 1,500,000 factory Direct labour hours 500 1500 2,000 Machine 120,000 Machine hours 2,200 800 3,000 processing Baldu Biru determines selling prices by adding 30% to the products' total costs. Required: a. Compute the cost per-unit and selling price for the Clarinet and Flute based on the traditional approach. (6 Marks) b. Compute the cost per-unit and selling price for the Clarinet and Flute based on the activity-based costing (8 Marks) c. Traditional costing often claimed to cause product distortion and cross subsidization. Explain how the activity-based costing is a better alternative? (6 Marks)