DroneTech manufactures specialised drones for government surveillance and monitoring purposes. To date it has only been making and selling a single standard model. Recently however DroneTech introduced a high resolution compact (HRC) model, which has a smaller body with stealth capability, highly advanced cameras and is more manoeuvrable. Since its introduction, sales of the HRC model have been strong but overall company prots have declined steadily. The company currently allocates manufacturing overheads to products based on direct labour hours. Material and labour costs for last month were as follows: Standard model HRC model Total Direct materials $280,000 $240,000 $520,000 Direct labour $330,000 $170,000 $500,000 Last month manufacturing overheads were $800,000 based on the production of 7,200 units of the standard model and 2,400 units of the HRC model. Each standard model uses 3 hours of direct labour while each HRC model uses 2 hour. Company management thinks that the current method of costing may not be accurate and wonders if using activity-based costing (ABC) could help to cost its drones more accurately. Company management recently hired KPlle consultants who discovered that overhead costs could be separated into three core activities. These activities, and their costs and cost drivers for last month, are summarised in the table below: Usage of cost driver Activity Cost Cost driver Standard HCR Total Equipment set- $520,000 Number of production runs 280 120 400 UP Quality Control $100,000 Number of random 30 70 100 inspections Material $180,000 Number of receiving 400 200 800 inspection reports Total $800,000 Reguired: a) Calculate the unit costs of each model if the overheads are allocated using direct labour hours. (2 marks) 1:) Calculate the unit cost of each model if the overheads are allocated using ABC. (3 marks) c) Should DroneTech discontinue the standard model? In answering this question ensure that you directly compare the ABC method to the direct labour hours method to explain the basis of your decision to discontinue the standard model or not. (5 marks}