Mokhtar Co. sells window treatments (shades, blinds and awnings) to both Regional and local customers. The following information relates to buted data for the current Regional Local Revenue $400,000 3580,000 Direct materials cost 30,000 50,000 Direct labour cost 100,000 300,000 The total overhead cost is $235,000. Currently, overhead is allocated to the products on the basis of the direct labour cost. Fatima, the controler does not believe the data produced by current system and is considering implementing an ABC system. She asks her accountant to conduct some investigations and the results are as follows: Estimated Activity overhead Scheduling and travel $85,000 Setup time 90,000 Supervision 60,000 Cost drivers Hours of travel Number of setups Direct labour cost The two products had the following expected use of cost drivers: Local Regional 700 500 Hours of travel 300 200 Number of setups $100,000 Direct labour cost $300,000 Required: a. Prepare income statements for each of the two product lines using the traditional costing system (4 Marks b. Prepare income statements for each of the two product lines using the Activity Based Costing system (6 Marks c. Briefly explain why the performance of the two products is different under the two methods. Provide specific examples from the data to support your Marie [insert your answers to question 2 here)