Office Products Ltd manufactures two different multifunction printers $($MFPs$)$ for the business market.

Cost estimates for the two models for the current year are as follows:

Basic Advanced

Direct material $ $800$ $$1600$

Direct labour $(*)600600$

Manufacturing overhead $(**)800800$

Total $$2,200$ $$3,000$

$*$ Direct labour cost is $$30$ per direct labour hour.

$**$ The predetermined plantwide overhead rate is $$40$ per direct labour hour.

Each model of MFP requires $20$ hours of direct labour. The basic model requires $5$ hours in department

A and $15$ hours in department B$.$ The advanced model requires $15$ hours in department A and $5$ hours

in department B$.$ The budgeted overhead costs in these two production departments are as follows:

Department A Department B

Variable overhead $$32$ per direct labour hour $$8$ per direct labour hour

Fixed overhead $$400,000$ $$400,000$

The management expects to operate at a level of $20,000$ direct labour hours in each production

department during the current year.

From next year onwards, the company has planned to implement an activity$-$based costing system for

its manufacturing overhead costs, with the activity cost pools and activity driver data below.

Activity drivers

Activity Activity cost Total Basic model Advanced model

Machine setup $ $200,000200$ setups $50$ setups $150$ setups

Material receiving $120,00080,000$ kilograms $30,000$ kilograms $50,000$ kilograms

Inspection $160,0001,600$ inspections $700$ inspections $900$ inspections

Machinery$-$related $840,00060,000$ MH$*20,000$ MH $40,000$ MH

Engineering $280,0007,000$ EH$3,000$ EH $4,000$ EH

Total overhead $$1,600,000$

$*$ MH $=$ machine hours.

$$ EH $=$ engineering hours.

The company plans to produce $1,000$ units for each model of MFP$.$