QUESTION 4 [15 MARKS] Alpha Beta Industries manufactures two products: MX3 and FTS. A review of the company's accounting records revealed the following per-unit costs and production volumes: MX3 FTS Production volume (units) 2,500 4,500 Direct material $ 35 S 55 Direct labour: 2 hours at $10/hour 20 3 hours at $10/hour 30 Manufacturing overhead is currently computed by spreading overhead of $1,750,000 over 20,000 direct labour hours. Management is considering a shift to activity-based costing in an effort to improve the firm's cost measurement, and the following data are available: Cost Driver Volume Cost Pool Cost Cost Driver MX3 FTS Total Setups $ 240,000 Number of setups 80 20 100 Assembly 1.390,000 Direct labour hours 5.000 15,000 20,000 Machine processing 120.000 Machine hours 2,200 800 3,000 $1.750.000 Required: (a) Using Activity Based costing determine the per unit overhead cost of products MX3 and FTS. (Hint: First find the overhead rates for each activity cost pool then allocate the overhead cost to each product, next find the overhead cost per unit for each product) (9 marks) (b) Discuss some practical challenges that company would face for the implementation of the Activity based costing system. (6 marks) o search EL