Please answer the 4 questions. If possible I want to know more about question 3.

Question 4 Activity-based Costing 25 marks Durbee Metal Products, Ltd., of Austarlia makes two specialty metal parts-S101 and T107- for Land Rovers. For many years, the company has used a simple plantwide cost driver rate based on direct labor hours in allocating manufacturing support costs. The company also uses an activity- based costing system for internal decision making purposes. After studying the plant's manufacturing activities and costs, the management accountant of Durbee has collected the following data for last year: Item S1012 T107 Units produced and solde 50,000 100,000 Direct labor hours used 100,000 300,000 Direct labor cost $1,000,000 $4,500,000 Number of times handled 40,000 20,000 Number of parts 12,000 8,000 Number of design changes 2,000 1,000 Number of product setups 8,000 6,000 The management accountant has also estimated that the following manufacturing support costs and activities will be incurred. Cost pool Handling Number of parts Design changes Setups Organization -sustaining costs Totale Total activity 60,000 20,000 3,000 14,000 Whole plant Costs $3,000,000 2,400,000 3,300,000 2,800,000 2,800,000 $14,300,000 The direct materials cost for product S101 is $120 per unit, while for product T107 it is $140 per unit. The company determines its product prices by adding a 25% markup to its reported product costs. Required (a) Compute the product margins for the parts- S101 and T107 under the company's traditional costing system. You must show all of your calculation. 5 marks (b) Compute the product margins for the parts- S101 and T107 under the company's using ABC system. You must show all of your calculations. 5 marks (c) Explain which of the two methods from requirement (a) and (b) produces more accurate estimates of job costs and prices, and why? Justify your answer using calculations from requirement (a) and (b) 10 marks (d) Explain why Durbee should continue using ABC as a supplement to rather a replacement for, the company's usual costing system? 5 marks t a