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PROBLEM 2 (Activity Based Costing & Incremental Analysis) 25 MARKS Part A 15 Marks In another of its divisions, Intune Global Corp. 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. This division currently produces two products, X and Y. The quantities produced in a recent period were 5,000 of product X and 10,000 of product Y. Product X is a large specialty product that is produced in small batches. Product Y is a smaller product that is produced in somewhat larger batches. Activity cost pools and activity measurements are presented below. Overhead Quantity Quantity Activity Cost of Cost Driver used by used by TOTAL Activity product x product Y Machining $200,000 Number of machine hours 16,000 24,000 40,000 Receiving 112,500 Number of purchase orders 250 500 750 Testing 40.000 Number of tests 15 35 Total $352,500 50 Additional information is also provided: Product X Product Y Direct Materials per unit $45.50 $23.95 Direct Labour per unit $45.00 $24.00 Required: a) Compute an overhead rate for each cost pool. 3 Marks b) Assign overhead costs to each product line and total the overhead cost assigned to each product. 6 Marks c) Calculate the overhead cost per unit of product X and Y. 2 Marks d) Compute the total cost per unit of product X and Y. 4 Marks