FurniLab is a manufacturer of custom-made furniture. Below is a table that shows manufacturing overhead (MOH) costs for the last six months of year 2021, along with the number of direct labour hours (DLH) that is assumed to be the cost driver. Furnilab wants to know the cost function based on the high-low method, so that it can use this cost function to estimate MOH costs for next year (year 2022) to apply the normal costing system when assigning costs to jobs that it receives. MOH costs ($) Month DLH Jul 2,700 90,000 Aug 3,500 95,000 Sep 3,100 85,500 Oct 2,400 74,750 Nov 2,000 Dec 3,300 65,000 93,500 Required: 1. Estimate the 2021 cost function based on the high-low method. [5 marks] 2. For 2022, Furnilab expects that it will incur 40,000 DLH. Based on this information and the cost function you estimated in number 1, what is the predetermined overhead rate that Furnilab should use in 2022 to allocate its overhead costs to jobs? (Hint: use the cost function derived from high-low method to calculate estimated total MOH costs for 2022). [5 marks] 3. In March 2022, Furnilab received a job (Job B29) from one of its clients. This job requires $3,200 of direct materials and 120 DLH @ $30 per DLH. Determine the total costs for Job B29. [5 marks] 4. Recently, Furnilab heard about a refined costing system called activity-based costing (ABC) system and is considering replacing its current simple costing system (which allocates MOH costs based on DLH) with the ABC system. Based on data-gathering process performed by the accounting and production staff, below is the necessary information related to the ABC system: Activity Activity 1 Activity Cost ($) 80,000 Activity Cost Driver 16,000 Activity 2 60,000 10,000 Machine hours Number of setups Activity 3 300,000 40,000 DLH Activity 4 125,000 5,000 Number of batches Activity 5 225,000 15,000 Number of orders Job B29 requires 80 machine hours, 20 setups, 10 batches and 15 orders. How much is the total cost for Job B29 if Furnilab uses the ABC system? [8 marks] 5. Evaluate your answer in number 3 and 4. Based on your opinion, which costing system would you recommend Furnilab to use? Justify your answer. [7 marks]