Question Two SOT Company makes and sells two products, X and Y Data for production and sales each month are as follows: Product X 4.000 Product -Y 8.000 10 Sales demand (units Direct Materials costunit($) Direct Labour hours/unit (hours) Direct Labour costunit (5) 20 0.1 02 2 4 Production overheads are $500 000 each month An analysis of overhead costs suggests that there are four main activities that cause overhead expenditure. The usage of activities is as follows: Cost pool Total $ Cost Driver Total Product Product number Activity Overheads X Y 10 10 24 Batch Setup Order handing Machining Quality Control Total Overheads 100,000 No of setup 20 200,000 No of Orders 40 120,000 Machine hrs 15,000 89.000 No of Checks 32 $500.000 16 9.000 6.000 18 14 Required: Calculate the full production costs for product X and Y Using 1) Traditional absorption costeg (absorption production overhead on a direct labour hours basis (10 Marks) 2) Activity Based Costing for absorption of overhead con- (15 Marks) TEOS 0.12 olho