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Question 1 (16 marks) The traditional costing system used by Jimmy Ltd shows below the details of two products manufactured Production volume Direct materials per
Question 1 (16 marks) The traditional costing system used by Jimmy Ltd shows below the details of two products manufactured Production volume Direct materials per unit Direct labour Allocated manufacturing overhead per unit Product A 12,000 $20 $14 $215 Product B 14,000 $25 $10 $250 As the company lost some of its major customers, Sara Walsh, the management accountant collected the following information about the possibility of using the Activity-Based Costing system Activity Annual cost Cost driver Material handling Inspections Delivery Production returns $130,000 $130,000 $26,000 $52,000 260 Orders executed 130 production runs 65 shipments 130 production returns Consumption of cost driver Product A Product B 150 110 90 40 50 15 90 40 Required 1. Under Activity-based costing, what is the manufacturing overhead per unit for product A and| product B? Round your answer to decimal places 2. Under the traditional costing system, what is the cost per unit for product A and product B? 3. Under activity-based costing system, what is the cost per unit for product A and product B? 4. If the selling price is $200 per unit for product A, what is the profit per unit sold of product A under the traditional costing system and the activity-based costing system
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