Question 1: 50% Pacic Furniture produces two types of exotic tables for indoor and outdoor. Pacific Furniture uses direct materials and direct labour as its direct cost, and one indirect cost that is allocated based on machine hours. The current selected data for recent year is as follow: Indoor Outdoor Units sold 3,200 1,800 Selling price $125 $200 Direct material cost per unit $30 $45 Direct production labour cost $16 $16 per hour Direct production labourhours 1'50 225 per unit Production runs 40 85 Material moves 72 168 Machine setups 45 155 Machinehours 5,500 4,500 Number of inspections 250 150 Pacic Furniture has been using the traditional method for cost allocation, which allocates its indirect costs based on machine hours. Daniel, the manager of Pacic Furniture is interested in using the ABC system to improve its competitiveness in the current market. Therefore, Daniel collected the indirect cost activities as presented below: Activity Activity cost Activitycost driver Product-Ion $200,000 Production runs scheduling Material handling $45,000 Material moves Machine setup $25,000 Machine setups Assembly $60,000 Machinehours Inspection $8,000 meel 0f Inspections Marketing costs were determined to be 3% of the sales revenue for each type of table. Required (show all workings) 1) Calculate manufacturing costs per unit for each type of table using (25 marks) the simple method that allocated indirect cost (overhead cost) based on machine hours. 2) Calculate manufacturing costs per unit for each type of table using (25 marks) Activity Based Costing (ABC)