Problems 1. Realwood Pty Ltd manufactures two types of timber felling machines Toppler and Muncher. The company is currently using a traditional costing system with machine hours as the cost driver. The company is considering whether to use the activity-based costing (ABC) method to allocate overhead costs to products. Budgeted overhead costs of the upcoming accounting period follow: Activity Total budgeted Activity driver Budgeted level for activity cost activity driver Warehousing $55 000 Number of material 550 moves moves Machine $47 000 Number of 16 000 hours maintenance machine hours Setup $250 000 Number of 400 runs production runs Information for the two products completed during the period is as follows: Muncher Toppler Number of material moves 320 280 Number of production runs 60 100 Total machine hours 10500 5500 Units completed 3000 1000 Direct material cost per unit $20 $35 Direct labour cost per unit $40 $70 Required: a) Calculate the unit cost of each product if the conventional costing approach is used. b) Determine the cost of producing each product if activity-based costing is used