Olsen Ropes, a Norwegian Company, produces ropes exclusively for the maritime industry since 1777 . Through a standardized product range Olsen Ropes can cover all customer rope needs. Olsen Ropes are used on some of the world's largest and most technologically advanced vessels. Olsen Ropes are marketing their ropes under the trademark "Ropol TM ". The company produces five different styles of ropes for different ship types: Bulker, Tanker, Container, Offshore, and Cruise, in a highly automated batch machining process. The following table summarizes the production and cost data for the five products. Annual overhead is kr11,600,000. Required: a. Compute the total unit cost of each rope type (Ropol TM-Bulker, Ropol TM-Tanker, Ropol TM-Container, Ropol TM-Offshore, Ropol TM-Cruise) using absorption costing. Overhead is assigned to individual products using direct labor cost. b. Upon further analysis, you discover that the annual overhead of kr11,600,000 consists entirely of the highly automated machining process. Each rope type is produced in batches with ropes of the same type. Each batch requires the same amount of machine time. That is, producing a batch of 220 Ropol TM-Bulker ropes requires the same amount of machine time as a batch of 50RopolTM-Cruise ropes. The following table summarizes the batch size for each rope type: Compute the unit cost of each rope type (Ropol TM-Bulker, Ropol TM-Tanker, Ropol TM-Container, Ropol TM-Offshore, Ropol TM-Cruise) using activity-based costing. c. Prepare a table comparing the activity-based cost and absorption cost of each product. Discuss why the product costs differ between the two costing methods