Question below;

Question 2 (25 marks): The Caspian Company manufactures two products H and L. Budgeted data on the two products for a particular period are as follows: Product H Product L Production and sales (units) 2,000 1,000 Direct material cost (per unit) $15 $21 Direct labour hours (per unit) 5 Direct labour cost per unit $20 $16 Number of production runs 9 11 Number of purchase orders 7 15 Number of inspections 8 12 Number of production notices 4 Production overhead costs: $ Set-up 120,000 Purchasing 88,000 Inspection 104,000 Engineering 108,000 Total 420,000 All production overhead costs of the company are fixed. The company currently assigns production overheads to products using a plant-wide rate based on direct labour hours but is thinking of converting to an activity-based costing (ABC) system. Required: answer the questions which follow. Note: the questions require just one-word or short answers (for example part (a) $20,000; part (b) product X) (a) Calculate the overhead absorption rate (OAR) based on direct labour hours using the current traditional costing system. Answer: (b) Calculate the unit total cost of product H using the current traditional costing system. Answer: (c) Calculate the unit total cost of product L using the current traditional costing system. Answer: (d) Using the ABC (Activity-Based Costing) method, calculate the cost-driver-rate (CDR) for the set-up activity. Answer: (e) Using the ABC (Activity-Based Costing) method, calculate the cost-driver-rate (CDR) for the purchasing activity. Answer: (f) Using the ABC (Activity-Based Costing) method, calculate the cost-driver-rate (CDR) for the inspection activity. Answer: (g) Using the ABC (Activity-Based Costing) method, calculate the cost-driver-rate (CDR) for the engineering activity. Answer: . (h) Using the ABC (Activity-Based Costing) method, calculate the set-up cost per unit of product H. Answer:(i) Using the ABC (Activity-Based Costing) method, calculate the set-up cost per unit of product L. Answer: () Using the ABC (Activity-Based Costing) method, calculate the purchasing cost per unit of product H. Answer: (k) Using the ABC (Activity-Based Costing) method, calculate the purchasing cost per unit of product L. Answer: (l) Using the ABC (Activity-Based Costing) method, calculate the inspection cost per unit of product H. Answer: (m) Using the ABC (Activity-Based Costing) method, calculate the inspection cost per unit of product L. Answer: (n) Using the ABC (Activity-Based Costing) method, calculate the engineering cost per unit of product H. Answer: (o) Using the ABC (Activity-Based Costing) method, calculate the engineering cost per unit of product L. Answer: (p) Calculate the unit total cost of product H using the ABC method. Answer: (q) Calculate the unit total cost of product L using the ABC method. Answer: (r) Which product will be over-priced by the company relative to its competitors under the current traditional costing method? Answer: (s) Which product will be underpriced by the company relative to its competitors under the current traditional costing method? Answer: (t) Under the current traditional costing method, which product will be selling better for the company