QUESTION 2 MHM Manufacturing Company is currently engaged in the production of three products; A, B and C. These products use the same raw materials, though the consumption of quantity differs. Details of quantity required to each product in terms unit and labour hours provided as below: ABC Direct Material (Units consumed) 2 3 4 Direct Labour (No. of hours) 232 Direct materials cost RO 3.2 per unit while the direct labour costs are RO 2.5 per hour. For many years, the company has been using absorption costing for allocating overheads. The basis of allocation used was the total labour hours. The budgeted production of these products are given below Budgeted Production 5,000 6,000 10,000 Details of overhead are given below. Total Machine Set Up Costs 25,000 Procurement expenses 30,000 Machine running costs 55,000 After Sales Support 20,000 Details of the cost drivers are given below; ABC No. of machine set up 40 30 30 No. of purchase orders 300 400 300 Machine hours per unit 2 4 6 No. of visits to the customer 100 150 50 You are required to calculate: - a Cost per unit for each product using Absorption costing b. Cost per unit for each product using ABC c. Identify products for which under costing and/or over costing is observed. 15 Marks)