QUESTION 3 (20 MARKS: 48 MINUTES) Teja Sdn Bhd (TSB) produces two types of hiking gloves: premium and standard. The company uses direct labour hours as a basis to calculate plantwide overhead rate. Total overhead cost for the company is RM637,000. The breakdown of the overhead cost by activities is shown below: Activity Activity Cost RM175,000 Setting up equipment Machining RM154,000 Production scheduling RM73,500 Inspecting products RM101,500 Moving materials RM133,000 The cost drivers for the activity are production runs, number of moves, inspection hours, number of setups, and machine hour. The production data for the company is as follows: Premium Standard Units produced 21,000 119,000 Direct materials RM189,875 RM665,525 Direct labour RM33,600 RM112,000 Direct labour hours 24,500 115,500 Number of setups 42 98 Machine hours 2,800 4,900 Production runs 84 210 Inspection hours 350 Number of moves. 125 1,680 225 REQUIRED: (a) Calculate the unit cost of premium and standard gloves based on plantwide overhead rate. (b) (6 Marks) Calculate the unit cost of premium and standard gloves if TSB allocates overhead costs using Activity-Based Costing (ABC) system. (12 Marks) (c) Explain why traditional costing is less superior than ABC in allocating overhead cost. (2 Marks)