Isa manufactures two products: P and D. The following information relates to annual production: P D Direct costs (per unit) $12 $24 Production (units) 24,000 24,000 Direct labour hours (per unit) 1.0 1.5 Number of orders 10 140 Number of batches 12 240 Number of set-ups (per batch) 1 3 Special parts (per unit) 1 4 Information relating to production overheads for the period were as follows: Cost Driver Annual Cost $ Set-up costs Number of set-ups 73,200 Special parts handling Number of special parts 60,000 Other materials handling Number of batches 63,000 Order handling Number of orders 19,800 Other overheads - 216,000 Total costs 432,000 NOTE - Other overhead costs do not have an identifiable cost driver, and in an ABC system, these overheads would be recovered on a direct labour hours basis. Required: (a) Calculate the production cost per unit of P and of D if Isa uses traditional absorption costing and the overheads are absorbed on a direct labour hours basis. (b) Calculate the production cost per unit of P and of D if the company uses Activity based costing (ABC). (c) Comment on the reasons for the differences in the production cost per unit between the two methods. (d) What are the implications for management of using an ABC system instead of an absorption costing system?. Multi Line Text.