bu: Read the following case relating to a toy manufacturing company produces two products: Product A and B and solve the questions given at the end of the case using the data. The budgeted cost information for each product is as follows. Particulars Product-A Product - B Material Labor 30 40 20 15 Production overhead cost incurred Machine cost 300000 Set up cost 700000 Quality inspection cost 250000 Total 1250000 For each of product "A" and "B" we are also given the following information: Product "A" Product "B" No of units produced 20000 40000 No production runs 180 100 No of inspection 300 400 No of machine hours 50000 50000 Requirements: 1. Calculate the cost of each unit of product "A" and "s" under absorption (Traditional method) costing using the number of units as basis of absorption. 2. Calculate the cost of each unit of product "A" and "B" using ABC system In this case we are required to suggest the toy company whether to adopt ABC or not. Calculation of cost per unit under absorption costing method Total no of unit produced = No of Units produced A+ No of Units produced No of unit produced A = 20000 No of unit produced 5 = 40000 Total No of units produced = 20000 - 40000 = 50000 Total overhead expenses = 1250000 Cost per unit under absorption method = Total overhead expenses / Total No of units produced Cost per unit under absorption method = 1250000 / 50000 = 20.83 Product-A Product - B Material 20 15 Overhead expenses 20.83 30 40 Labor 20.83