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Alpha Ltd manufactures two products A and B. The product A is a low-volume item and its sales are only 12,500 units per annum. The product B is a high-volume item and sales are 50,000 units per annum. Both products require two direct labour-hours for completion. The company works 50,000 direct labour-hours each year as given below: Product A Product B 12,500 units x 2 hours 50,000 units x 3 hours Hours 25,000 150,000 175,000 Details of costs for material and labour for each product (per unit) are given below: Product A B Rs. Rs. Direct Materials 25 20 Direct Labour (at Rs. 5 per hour) 10 15 The company's total manufacturing overheads costs are Rs1,050,000 per annum. The company has analysed its operations and has determined that five activities act as cost drivers in the incurrence of overhead costs. Data relating to the five activities are given below: Costs Number of Events or Transactions Activity Rs Product A Product B Machine setups 276,000 3,600 2,400 Quality inspections 192,000 6,000 3,600 Production orders 97,200 240 480 Machine-hours worked 376,800 14,400 33,600 Material receipts 108,000 180 720 Total 1,050,000 REQUIRED (a) Compute per unit cost of each product using Activity Based Costing technique for absorption of overhead costs. [15 Marks] (b) What are the advantages and disadvantages of activity-based costing. [10 Marks]