Cornelius Ltd is a UK based company that manufactures two types of wooden wardrobes, named

basic $($Product $A)$ and luxurious $($Product $B).$ The production data for the two products are shown

in the table below. The company currently uses a job costing system to charge overheads to

products on a factory$-$wide basis using machine hours as the absorption base. The budgeted

overhead costs are $80,000$ and $20,000$ machine hours are expected to be used. Further

information on the manufacturing of the two products are provided below:

The company's management accountant believes that this costing system is leading to inaccurate

job costs and is considering changing to departmental overhead absorption rates based on the

dominant activity in each department. Details of the costs and activities in the company's two

departments are as follows:

However, the new management accountant is also considering the possibility of introducing an

activity based costing system, as it would lead to much more accurate product costs, and has

allocated manufacturing overheads to activity$-$based cost pools.

The amounts recorded for each activity and the level of the related cost driver are as follows:

Required:

Calculate the unit product cost of Product A and Product $B$ according to the existing

job costing system of charging manufacturing overhead to products. Where needed,

show your answer to $2$ decimal places. In so doing, ensure you show your workings clearly.

$(10$ marks$)$

Calculate the unit product cost of Product A and Product $B$ using departmental

overhead rates. Where needed, show your answer to $2$ decimal places. In so doing, ensure

you show your workings clearly.

$(12$ marks$)$

Calculate the unit product cost of Product A and Product $B$ using the cost drivers

identified by the new management accountant, to allocate overheads to the two

products. Where needed, show your answer to $2$ decimal places. In so doing, ensure you

show your workings clearly.

$(13$ marks$)$