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Question 1 KL manufactures three products, W,X and Y. Each product uses the same materials and the same type of direct labour but in different quantities. The company currently uses a cost plus basis to determine the selling price of its products. This is based on full cost using an overhead absorption rate per direct labour hour. However, the managing director is concerned that the company might be losing sales because of its approach to setting prices. The direct costs of the three products are shown below: In addition to the above direct costs, KL incurs annual indirect production costs of $1,044,000. Required: (a) Calculate the full cost per unit of each product using KL's current method of traditional costing. (4 marks) An analysis of the company's indirect production costs shows the following: The following additional data relate to each product: Required: (b) Calculate the full cost per unit of each product using activity based costing. (8 marks)