QUESTION 4 Pewter Company is a leading manufacturer of silver picture frames. The company uses a traditional costing system to allocate production overheads to products using machine hours. The newly appointed financial controller believes that activity-based costing can provide a better allocation of production overheads to products than the current system does. The following total production overheads for the last period were recorded by the cost accounting system: RM Utility costs related to machine hours 189,000 Production set-up costs 120,000 Cost of ordering materials 18,000 Cost of handling materials 33,000 Total Overhead 360,000 Details of the two product models and relevant information for the last period are as follows: Model 1 Model 2 Number of productions runs 25 35 Number of material orders 35 55 Number of material requisitions 60 140 Units produced 1,000 2,000 Machine hours 4,000 5,000 Direct labour hours per unit (RM60/hour) 1.5 hours 2 hours Direct materials per unit RM 10 RM 12 REQUIRED: i. Calculate the production cost per unit for each of the model using the traditional cost allocation system. ii. Use ABC costing to determine the production cost per unit for each of the model