Comarch plc manufactures product A and B.

The following information is available form the company:

	Product A	Product B
Units produced	10000	20000
Selling price ($)	450	210
Direct materials and labour per unit ($)	250	90
Direct labour hours	30000	78000
Direct labour hours per unit	3	3,9

The company has a total budgeted overhead of $2,5 million.

The following overhead costs details are also available:

Activity	Budgeted cost
	in $
Set ups	400000
Machine running	1800000
Engineering	120000
Shiping	180000
Total	2500000

The company collect data about cost drivers:

Cost driver	Product A	Product B
Engineering hours	5000	7500
Number of set ups	200	100
Machine hours	52000	110000
Number of shipments	5000	10000

REQUIRED 1) You are required to allocate overheads using ABC costing (7 marks) 2) You are required to prepare profitability report for ABC (5 marks) 3) Recommend solution to improve cost management (3 mark)