QUESTION 4 (25 MARKS) Akea Manufacturing Bhd produces two popular grade of commercial carpeting among its many other products, Grade A and Grade B carpet. The Grade A is a low volume item totalling only 12,000 units per year whereas, the Grade B is a high volume item totalling 28,500 units per year. Expected annual overhead costs are RM3,800,000. The company uses a job costing system and applies overhead on a direct labour hour basis. Information about the company's product is as follows: Product Production (units) Direct material (RM per unit) Direct labour (per unit) Activity Akea Manufacturing Bhd's new manager, Mr. Adam believes that the traditional product costing system used by the company produces misleading cost information. He is suggesting the use of activity based costing and has established the following activity cost pools and cost drivers: Machine processing Quality control Shipments Machine setups Total Required: Data relevant to these activities are as follows: Cost Driver Date 11th September 2023 Cost Driver No. of machine hours No. of inspections No. of shipments No. of setups No. of machine hours No. of inspections No. of shipments No. of setups Grade A Grade A 12,000 55 15,000 200 1 hour (at RM8 per hour) 2 hours (at RM8 per ho 240 70 Activity Cost (RM) 1,500,000 840,000 760,000 700,000 3,800,000 Grade B Grade B 28,500 60 Course :BBAA1033 Management Accounting 1 35,000 400 140 30 Page 5 of 6 Calculate the unit manufacturing cost of each product of Grade A and Grade B carpet using the activity-based costing method. (25 marks)

QUESTION 4 (25 MARKS) Akea Manulacturing Bhd produces two popular grade of commercial carpeting among its many other products, Grade A and Grade B carpet. The Grade A is a low volume tem totalling only 12,000 units per year whereas, the Grade B is a high volume Iem totalling 28.500 units per year. Expected annual overhead costs are RM3,800,000. The company uses a job costing system and applies overhead on a direct labour hour basis. Information about the company's product is as follows: Akea Manufacturing Bhd's now manager, Mr. Adam believes that the traditional product costing system used by the company produces misleading cost information. He is suggesting the use of activity based costing and has established the following activity oost pools and cost drivers: Data relevant to these activites are as follows: Proe 5 of 6 Date : 11th September 2023 Course :BBAA 1033 Management Accounting 1 Required: Calculate the unit manufacturing cost of each product of Grade A and Grade B carpet using the activity-based costing method. (25 marks) QUESTION 4 (25 MARKS) Akea Manulacturing Bhd produces two popular grade of commercial carpeting among its many other products, Grade A and Grade B carpet. The Grade A is a low volume tem totalling only 12,000 units per year whereas, the Grade B is a high volume Iem totalling 28.500 units per year. Expected annual overhead costs are RM3,800,000. The company uses a job costing system and applies overhead on a direct labour hour basis. Information about the company's product is as follows: Akea Manufacturing Bhd's now manager, Mr. Adam believes that the traditional product costing system used by the company produces misleading cost information. He is suggesting the use of activity based costing and has established the following activity oost pools and cost drivers: Data relevant to these activites are as follows: Proe 5 of 6 Date : 11th September 2023 Course :BBAA 1033 Management Accounting 1 Required: Calculate the unit manufacturing cost of each product of Grade A and Grade B carpet using the activity-based costing method. (25 marks)