Fabulous Antique Berhad is a leading manufacturer of antique furniture. The company uses a traditional costing system to allocate production overheads to products using labour hours. However, the newly appointed cost accountant of the company is unhappy with the current method. He believes that activity-based costing can provide a better allocation of production overheads to products than the current system does. The following was total production overheads for the last period recorded by the cost accounting system: Budgeted Overheads (RM) Blanking 360,000.00 3,000 labour hours Machining 86,000.00 5,000 machine hours Welding 40,000.00 2,500 labour hours Assembly 30,000.00 2,000 labour hours An order for 500 units of ward robe: Classic model, made as Batch 2468, incurred the following costs: Department Basis of Absorption Materials RM6,400.00 Laboun Blanking 250 hours at RM5.50!hour Machining Welding 120 hours at RM5.50!hour Assembly 175 hours at RM6.50!hour Additional infon'nation: {0 The order require the rental of RM1,500.00 special X-ray equipment used to test the welds for Batch 2468. *9 The time booking in the machine shop was 750 machine hours. .39 Selling and administrative overheads are 20% of manufacturing cost. o} Budgeted labour hours is 30,000 hours