Question 1 Galleria a manufacturing business makes a product in two models, M1 and M2 Details are: M2 M1 Annual sales No of sales orders Sales price per unit Direct material cost per unit Direct labour hours per unit Direct labour rate per hour Special parts per unit 8000 250 RM73 RM21 2.5 RM8 8000 60 RM54 RM11 units RM8 2 2000 units 100 units Production batch size Set-ups per batch Issues of material for each batch RM Overhead analysis set-up costs Material handling costs Special part handling costs Customer invoicing costs Other overheads 97,600 42,000 50,000 31,000 108,000 328,600 A customer has indicated an interest in placing a large order for either model M1 or M2 and the sales manager wishes to sell the higher-priced model M2 Required: (a) Calculate the profit per unit for each model, using ABC. (b) Based on your answer in part (a), advice the manager which model he should sell to the customer. Provide appropriate justifications for your answer. (15 marks) (10 marks)