Question 1 (25 Marks) Cendana Bhd produces three products using the same production methods and equipments. They are practicing conventional product costing system and considering of implementing the ABC method in the near future. The direct labor cost is RM6 per hour. The production overheads are absorbed on machine hour basis. The rate for the period is RM28 per machine hour. Below are the data about the products: Product Pretty Handsome Vogue Units produced 750 1,250 7,000 Direct Material per unit RM 20 RM 12 RM 25 Direct Labor hours per unit 12 112 1 Machine hours 142 1 3 Further analysis of the total production overheads can be divided as follows: Costs relating to set-ups Costs relating to machinery Costs relating to materials handling Costs relating to inspection Total production overhead % 40 15 20 25 100 Further analysis of the total production overheads can be divided as follows: Costs relating to set-ups Costs relating to machinery Costs relating to materials handling Costs relating to inspection Total production overhead % 40 15 20 25 100 The following are the total activity volumes associated with the product line: Pretty Product No of set ups No of movements of materials Number of inspection 75 12 150 Handsome 115 21 Vogue 480 87 670 Total 670 120 1,000 180 Required: a) Calculate the cost per unit for each product using conventional methods (9 marks) b) Calculate the cost per unit for each product using ABC principles. (16 marks)