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1. Precision Rings Global Inc. (PRG) produces two types of rings. Steel rings and Plastic rings. These rings are highly useful in machine industry. Their financial information is PRG faced stiff competition in the market. Therefore, it decided to revisit the existing cost system. It identifies that Activity Based Costing (ABC) system will be able to provide an exact cost for its products. Under new ABC system, PRG identifies the two activities (Supervision, and Inspection) necessary for its activities. The total cost incurred for each activity is identified as Rs. 1,10,000 for Supervision and Rs. 12,90,000 for Inspection activities. It was also found that Direct labor hours (DLH) could be a suitable cost driver for Supervision. Similarly, the total number of inspections is suitable for the assignment of Inspection activity cost. 1.1. Calculate profit for each product category considering the existing costing system. 1.2. Calculate the profit (for each product category) considering the proposed ABC system. 1.3. Given a situation where PRG is utilising only 80% of its installed capacity for each product. The current output level is only 80 percent of their earlier planning and the total of installed overhead cost is Rs. 14,00,000 (Rs. 1,10,000 for Supervision and Rs. 12,90,000 ). Other things remain unchanged. What will be its new profit (for each product category) from both products categories? Marks (5+10+5=20)