Part A Banana Co. Ltd. specialises in manufacturing electronic products. The range comprises of 2 products, bPhone ('BP') and bTab (BT'). The company's products have the data shown below. Products Monthly Production Quantity 4,000 units BP BT 6,000 units Direct labour hours per unit 2 4 Selling Price $5,000 $4,000 Unit variable costs: Direct Material $1,500 $900 Direct Labour Other variable O/H $1,000 $500 $1,300 $500 The company has adopted absorption costing method in terms of direct labour hour. The total estimated fixed cost is $1,600,000 per month. a) Discuss the pros and cons in using absorption costing method to help management decision-making (5 marks) b) The company is considering using Marginal Costing and Activity Based Costing as alternatives of Absorption Costing, identify one managerial decision making situation where each approach is more appropriate than Absorption Costing method**. (20 marks) c) What is the contribution per unit for BP and BT respectively? (4 marks) d) If Banana Co. faces limited labour supply, which product should enjoy a higher production priority? (6 marks) e) Calculate the unit costs of BP and BT based on absorption costing and marginal costing methods 1) There are special orders for BP and BT at $2,800 per unit: (8 marks) - Which costing method should be used for the accept or reject decision; - Whether the two special orders should be accepted or not? (7 marks) ** It is important that students critically evaluate the two approaches rather than merely describe them. It is also important that students provide one managerial decision making situations for each approach and include the justification as to why one is better than the other two. (50 marks)