management accounting

Normal manufacturing overhead costs of GI Company for April 2015 are as follows: COST POOLS NORMAL COSTS Electric power RM40,000 Materials handling RM90,000 Setups RM80,000 Quality inspections RM40 000 Total RM250,000 The present cost accounting system allocates overhead costs to nal products based on machine hours. Estimated machine hours for April 2015 are 50,000. After losing several bids recently, Mr. Amar, the president, asked the controller to implement an activity-based costing system, because he was told that activity-based costing provides more accurate product cost estimates. The controller collected the following data: ACTIVITIES COST AVAILABLE COSTS DRIVERS CAPACITY Electric Kilowatt 20,000 RM40,000 power hours kwh Materials Material 5,000 RM90,000 handling moves moves Setups Machine 1,000 RM80,000 setups setups Quality No. of 2,000 RM40,000 inspections inspections inspections The company recently received a request for a bid to supply 1,000 units of its product M5. The following estimates were prepared for the production of 1,000 units of M5: ITEM AMOUNT Direct material costs RM20,000 Direct labour costs RM18,000 Machine hours 1,800 Direct labour hours 2,000 Kilowatt hours of electricity 2,000 Number of material moves 40 Number of machine setups 5 Number of quality inspections 20 REQUIRED: (a) What is the estimated cost per unit of M5 under the present cost accounting system? (b) What is the estimated cost per unit of M5 if activity- based costing is used