Question 3 The following data relates to costs, output volume and cost drivers of the ABC Rubber Company for June 19X1. Total Product P 3 000 units R per unit 12 3 15 Product Q 2 000 units R per unit 11 6 Product R 1 500 units R per unit 8 2 10 R70 000 R24 000 R94 000 1 1 0.5 2 8 3 0.333 2 10 10 2 2 20 15 Production and Sales Direct Production costs Direct Materials Direct Labour Prime Cost Production Information Labour hours per unit Machine hours per unit Number of production runs Number of deliveries to Customers Number of production orders Number of deliveries of Materials into store Production overhead costs Machining Set-up costs Materials handling (receiving) Packing Costs Engineering 30 17 5 3 15 20 50 40 R 71 500 10 500 35 000 22 500 25 500 ISO Indirect production overheads that are not driven by production volume are: Activity Cost Driver Set-up costs Production Runs Materials Handling Deliveries of materials Packing Delivenes to customers Engineering Production orders There were no opening stocks at the beginning of June 30 17 wu 15 20 JU 40 Number or producuon orders Number of deliveries of Materials into store Production overhead costs Machining Set-up costs Materials handling (receiving) Packing Costs Engineering R 71 500 10 500 35 000 22 500 25 500 lbs Co Indirect production overheads that are not driven by production volume are: Activity Cost Driver Set-up costs Production Runs Materials Handling Deliveries of materials Packing Deliveries to customers Engineering Production orders There were no opening stocks at the beginning of June REQUIRED: a) What would be the full production cost per unit of product Rif overheads were absorbed on the basis of direct labour hours? b) What would be the full production cost per unit of product Rif materials handling overheads were absorbed on the basis of direct material cost and all other overheads were absorbed on a machine hour basis? c) What would be the full production cost per unit of product R using activity based costing and the cost drivers described above with machining overheads that are driven by production volume allocated on a machine hour basis