PQR Ltd. is engaged in the production of three products P, Q and R. The company calculates Activity Cost Rates on the basis of Cost Driver capacity which is provided as below: Activity Cost Driver Cost Driver Capacity Cost (3) Direct Labour hours Labour hours 30,000 Labour hours 3,00,000 Production runs No. of Production runs 600 Production runs 1,80,000 Quality Inspections No. of Inspection 8000 Inspections 2,40,000 The consumption of activities during the period is as under: Activity/Products P Q R Direct Labour hours 10,000 8,000 6,000 Production runs 200 180 160 Quality Inspection 3,000 2.500 1,500 You are required to: (1) Compute the costs allocated to each Product from each Activity. (i) Calculate the cost of unused capacity for each Activity. (i) A potential customer has approached the company for supply of 12,000 units of a new product. 'S' to be delivered in lots of 1500 units per quarter. This will involve an initial design cost of 30,000 and per quarter production will involve the following: Direct Material Direct Labour hours 18,000 1,500 hours 14/28 No. of Production runs No. of Quality Inspection 15 250 Prepare cost sheet segregating Direct and Indirect costs and compute the Sales value per quarter of product 'S' using ABC system considering a markup of 20% on cost