Question 4 Elton Manufacturing Co produces three types of products - A, B and C. Product costs are currently calculated using absorption costing, with overheads being absorbed on a machine hour basis. The directors have decided to introduce Activity Based Costing. You are the manager of the company and you have obtained the following data: Product A B C RM RM RM Selling price per unit 300 530 435 Direct material per unit 55 67 98 Direct labour per unit 41 54 57 Budgeted production volume 600 units 400 units 200 units Machine hours per unit 0.6 1.5 0.6 Number of set up in the period 32 40 25 Number of sale orders in the period 19 5 15 Number of deliveries of material in the period 8 2 16 The budgeted overheads of the site for the period are: Machine running costs RM78,560 Set up costs RM82,900 Material delivery costs RM49,500 Required: (a) Using activity based costing (i) Calculate a production overhead absorption rate for each activity. (calculated to two decimal places) (3 marks) (ii) Calculate the full cost per unit of each product. (calculated to two decimal places) (15marks)