Question 1: 50% Pacific 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 allocated based on machine hours. The current selected data for recent year is as follow: Indoor Outdoor 1,800 $200 $45 Units sold 3.200 Selling price $125 Direct material cost per unit $30 Direct production labour cost per $16 hour Direct production labour-hours per unit 1.50 $16 2.25 Production runs 40 85 Material moves 72 168 Machine set-ups 45 155 Machine-hours 5.500 4.500 Number of inspections 250 150 Pacific Furniture has been using the traditional method for cost allocation, which allocates its indirect costs based on machine hours. Daniel, the manager of Pacific 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 cost Activity-cost driver $200,000 Production runs Activity Production scheduling Material handling Machine set-up Assembly $45,000 $25,000 $60,000 Material moves Machine set-ups Machine-hours Number of inspections Inspection $8,000 Marketing costs were determined to be 3% of the sales revenue for each type of table. Required (show all workings) (25 marks) 1) Calculate manufacturing costs per unit for each type of table using the simple method that allocated indirect cost (overhead cost) based on machine hours. (25 marks) 2) Calculate manufacturing costs per unit for each type of table using Activity Based Costing (ABC)