Citra bhd manufacturers two types of components, C1 and C2 and absorbs overheads on the basis of direct labour hours. Anticipated overheads for the upcoming accounting period is RM 972500, information about the company products is as follows

	C1	C2
Expected production volume (units)	3000	12000
Diect material costs	RM 32 PER UNIT	RM 40 PER UNIT
Direct labour /unit (rm 15/hour)	RM 30	RM 60

The overheads od citra bhd of RM 972500 can be identified with three main activities as follows

Order processing	Rm 180000
Machine processing	Rm 650000
Product inspection	Rm 142500

These activities are driven by number of orders processed , machine hours worked and insoection hours respectively. Data relevant to these activities are as follows

	C1	C2
Order processed	380	220
Machine hours worked	22000	28000
Inspection hours	3000	12000

Q1A Assuming the use of direct labour hours to apply overheads to production, compute the unit manufacturing costs of products C1 and C2 if the expected manufacturing volume is attained

Q1B - compute the absorption rates that would be used for order processing, machine processing and product inspection

Q1C assuming the use of activity based costing compute the unit manufacturing costs of products C1 and C2 if the expected manufacturing volume is attained

Q1D comparing the unit product costs calculated under the two costs calculated under the two costing systems state which product is overcost and which product is undercost, and how much? Additionally calculate the amount of the cost distortion for each product.