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QUESTION 2 Teguh Electronics Sdn. Bhd. (TESB) produces two oven models: X-200 Year 2020 new model (priced at RM900) X-100 Year 2010 old model (priced at RM1.140) The company currently uses a traditional costing method which would aggregate the direct material costs, direct labour costs, machine usage costs and manufacturing overhead costs as part of the products total manufacturing costs. Direct labour cost is at RM12 per hour and machine usage cost is at RM18 per hour. Estimated manufacturing overhead cost is RM4.800,000 and allocated on the basis of machine hours. Required: a) Calculate the manufacturing cost per unit for each oven model under the present traditional cost accounting system (5 marks) The CEO suggested for the company to concentrate marketing efforts on the X-200 model and to begin phasing out the X-100 model. The CEO would like to have an activity-based costing (ABC) analysis to be carried out before making any decisions. The following production and cost data are available for analysis: b) Calculate the manufacturing cost per unit for each oven model using the proposed activity-based costing (ABC) method. PER UNIT Data Direct Material Costs Direct Labour Hours Machine Hours X-200 RM208 1.5 DLH 8.0 MH X-100 RM584 3.5 DLH 4.0 MH Round all costs to two decimal places. (13 marks) c) Should TESB concentrates its marketing effort on X-200 or X-100? X-200 22.000 X-100 4.000 Units Produced Justify your decision with the net operating profit (net incoine) per unit for each oven under the ABC method Activity Cost Pool Show ALL workings (2 marks) Soldering Shipment Quality Control Purchase Orders Machining Machine set-ups Overhead Cost Cost Drivers (RM) 942.000 No. of solder joints 860.000 No. of shipments 1.240.000 No. of inspections 950.400 No. of orders 57,600 Machine hours 750.000 No. of set-ups Oven Models X-200 X-100 1.185.000 385.000 16.200 3.800 56.200 21,300 80.100 109.980 176.000 16.000 16,000 14.000 Selling and general administrative expenses per unit sold are RM265 for X-200 and RM244.50 for X-100 respectively