Question 3 Total 25 marks Kinko Ltd designs and produces Vessel parts. The company has three main departments that consume overhead resources: design, production and engineering. In 2021, actual variable production overhead is $280 000. Kinko's costing system allocates variable production overhead to its three customers based on machine-hours, and prices its contracts based on full costs. One of its customer has complained of being charged non-competitive price. Therefore, Kinko needs to look the consumption of overhead more closely and to investigate the issue. The data collected regarding this matter is available below: Usage of cost drivers by customers Sailing Illawarra Shellharbour Overhead Department Cost driver cost 2021 boat yacht Ship Design CAD-design hours $ 35,000 150 250 100 Production 25,000 130 100 270 Engineering hours $ Machine hours $ Engineering 220,000 300 3,700 1,000 $ 280,000 Required (show your workings): 1) Calculate the production overhead cost allocated to each customer in 2021 using machine-hours as the cost driver (traditional system). 7 marks 2) Calculate the production overhead cost allocated to each customer in 2021 14 marks using department-based production overhead rates (Activity Based Costing) 3) 4 marks Comment on your answers in requirements 1 and 2 and identify which customer was most likely to be overcharged in the traditional system. Q3 ANSWER HERE (PRESS ENTER TO CREATE MORE SPACE IF NEEDED)