Question 3: ABC costing Dr Strange Ltd produces premium bed linen. It uses a traditional cost accounting system to apply quality control costs uniformly to all products with a predetermined overhead rate of 16 per cent of direct labour cost. Monthly direct labour cost is $147 000. To distribute quality control costs more equitably, Dr Strange Ltd is considering activity-based costing. The following data relates to monthly quality control costs for its satin sheet range: Activity Activity driver Cost per unit of activity driverQuantity of activity driver Incoming material inspection Type of material In-process inspection $34.50 per type Product certification Number of units Number of orders$216 per order $0.42 per unit Required: (please round up to zero decimals unless otherwise stated) 24 types 35 000 units 50 orders 1. (a) Calculate the monthly quality control cost (total) to be assigned to the Manchester product line