p

Lake Corporation has received an order for handheld computers from Union Limited. The cost structure and other pertinent information is given below: 400 units are to be produced Direct materials Purchased part Activity Unit level Parts production Assembly Packaging & shipping Batch level Work cell setup Product level Product design Product simulation testing hours $60,000 $80,000 Activity cost rate $50.00 per machine hour Cost driver level 200 machine hours $20.00 per direct labour hour 100 direct labour hours $12.50 per unit $100 per setup 400 units 16 setups $60.00 per engineering hours 80 engineering hours $80.00 per testing hour 30 Facility level Building occupancy Required: (i) (ii) (iii) 200% of assembly labour cost Calculate the total cost and the unit cost of the order. (9 marks) Explain the role of activity-based systems in the management cycle. (6 marks) Describe the process costing system, identify the reason for its use, and discuss its role in the management cycle. (5 marks)