Duo plc produces two products A and B. Each has two components specified as sequentially numbered parts i.e. product A (parts 1 and 2) and product B (parts 3 and 4). Two production departments (machinery and fitting) are supported by five service activities (material procurement, material handling, maintenance, quality control and set up). Product A is a uniform product manufactured each year in 12 monthly high volume production runs. Product B is manufactured in low volume customised batches involving 25 separate production runs each month. Additional information is as follows: Product A Product B Parts 1, 2 300 000 units Parts 3,4 300 000 units Production details: Components Annual volume produced Annual direct labour hours: Machinery department Fitting department 500 000 DLH 150 000 DLH 600 000 DLH 200 000 DLH Overhead Cost Analysis" (000s) Material handling Material procurement Set-up Maintenance Quality control Machinery (machinery power, depreciation etc.) Fitting (machine, depreciation, power etc.) 1 500 2 000 1 500 2.500 3000 2 500 2 000 15 000 a It may be assumed that these represent fairly homogeneous activity-based cost pools. bIt is assumed these costs (depreciation, power etc.) are primarily production volume driven and that direct labour hours are an appropriate surrogate measure of this. Cost Driver Analysis Annual Cost Driver Volume per Component Cost Driver Part 1 Part 2 Part 3 Part 4 1 000 2000 300 Material movements Number of orders Number of set-ups Maintenance hours Number of inspections Direct labour hours Direct labour hours 180 200 12 7 000 360 150 000 50 000 160 300 12 5000 360 350 000 100 000 10 000 2400 200 000 60 000 1 200 4 000 300 8000 1000 400 000 140 000 You are required to compute the unit costs for products A and B using (i) a traditional volume-based product costing system and (ii) an activity-based costing system