Moleks Company makes three main product lines of ready-made clothes in the suburb of Ganuland. The management is considering to change the cost accounting policy with regards to overhead allocation. Currently, the company allocates overhead on the basis of direct material costs. A few of the board members feel that the company should switch to activity-based costing given the nature of activities related to the clothes preparation and production. You have been asked to show the difference between the existing and the proposed method of overhead allocation. The following information is available for you to analyse: Western Eastern Duos Materials cost per unit (RM15/metre) RM12 RM9 RM15 Labour cost per unit (RM10/hour) RM15 RM10 RM20 Machine hour per unit 30 minutes 15 minutes 18 minutes Units per batch 20 25 30 Sales price per unit RM60 RM50 RM65 Sales demand (unit) 500 2000 1200 Information related to activity-based costing: Activity Cost Pools Costs Allocation Base Material preparation RM42,000 Direct material costs Machine Setup RM14,500 Number of batches Sewing automation RM18,500 Machine hours Quality related RM9,000 Number of products