H Juice Confectionary Company (HJC) produces two grades of juice from mixed fruits that it buys from local growers. It produces and sells roughly 300,000 litres per month of a low- cost, high volume product called Sejukss. It sells this in 5-liter bottles. HJC also produces and sells roughly 30,000 litres per month of a low-volume, high cost juice called, Dingins. Dingins is sold in 1-liter bottles. Based on the recent data, the Sejuss product has not been as profitable as Dingins. The founder, Hazlee is not satisfied with the results as he believes that the company has been making profit with only Sejukss as the only product. It was not until the company started producing the more complicated Dingins that the profitability of Sejukss declined. Prior to introduction of Dingins, HJC has basic equipment and simple production processes. Because Dingins is bottled in 1-liter bottles, it requires considerably more time and effort, both to bottle and label and box than does Sejukss. The company must bottle and handle 5 times as many bottles of Dingins to sell the same quantity of Sejukss. Sejukss requires 3 types of fruits, whereas Dingins requires 5 fruits. Sejukss requires cleaning and inspection of equipment every 1000 litres, Dingins requires such maintenance every 60 litres. Hazlee has asked you to prepare an analysis of the cost per liter using traditional costing and using activity-based costing. The following information was collected: Sejukss Dingins Direct materials per liter RM4.00 RM12.00 Direct labor cost per liter RM0.50 RM0.90 Direct labor hours per liter 0.05 0.09 Total direct labor hours 15,000 1,250 Estimated use of cost driver per product Sejukss Dingins Activity cost Cost Driver pool Processing Cart of food Setup Setup hours Bottling Number of bottles Labelling and Number of bottles Boxing Maintenance Maintenance hours Estimated Overhead RM137,500 250,000 99,000 66,000 Estimated use of Cost Driver 5,500 5,000 330,000 330,000 5,000 1,500 300,000 300,000 500 3,500 30,000 30,000 97,500 600 300 300 Required: a) Calculate the product costs per litre for each product under the traditional costing system, using direct-labor hour as the allocation basis. b) Calculate unit product costs per litre for each product using the activity-based costing (ABC) system. c) Explain why the unit product costs differ under the two costing systems above