Part A 15 Marks In another of its divisions, Milles Fleurs Inc. has recently completed an exercise to utilize yet another costing system, Activity Based Costing, as the new Cost Accountant has advised of the numerous benefits of utilizing ABC. The division incurs $701,000 of overhead costs each year in its three main activity cost pools, machining, inspections and packing. The machining department works 4,000 hours per year, there are 600 inspections per year, and the packing department packs 1,000 orders per year. Details are as follows: Overhead Cost Driver Product X Product Y Total Activity Costs Driver Machining $400,000 Machining Hours 1,000 3,000 4,000 Inspections $201,000 # of Inspections 100 500 600 Packing $100,000 Orders Packed 350 650 1,000 Required: a. Compute the overhead rate for each Activity. (6 Marks) b. Assign the Overhead cost to each product. (6 Marks) c. The following have been provided for Product X: Direct Materials $225,000 Direct Labour $325,000 No. of Units produced 15,000 Compute the total cost per unit of product X. (3 Marks)g 1a Harks Milles Fleurs Inc. incurs the following costs to produce 15,0 units of a small suboomponent used in Product X: Direct materials 33AM Direct labor 11.25.] 1|it'arial'ile overhead 12.500 Fixed overhead 15.233411I An outside supplier has offered to sell Milles Fleurs the subcomponant for $2.35 a unit. If the company accepts the offer. it could use the production capacity to produce another product that would generate additional income of $3.. Additionally, $2,201} of the company's xed overhead will be avoided. Required: Using Incremental Analysis, advise Milles Fleurs Inc. as to 1whether they should continue to make the subccmponent or purchase them from the outside supplier. [1i] Marks)