REQUIRED Use the information provided below to calculate the following: 3.1 The manufacturing costs per unit and the total manufacturing costs, if all the overheads costs are absorbed on a machine hour basis. (4 marks) 3.2 The overheads cost per unit using the ABC system. (16 marks) INFORMATION Visa Limited manufactures two products and the company is keen on applying the principles of activity-based costing (ABC). Relevant information pertaining to the two products for a given period appear below: Product A Product B Output in units 720 540 Machine hours per unit 7 5 Direct materials cost per unit R300 R240 Direct labour cost per unit R147 R105 The two products are similar and are usually produced in production runs of 20 units and sold in batches of 10. Currently the production overheads are absorbed by using a machine hour rate, and the total of the production overheads for the period are as follows: R Machine department costs (rent, rates, depreciation and supervision) 30 960 Set-up costs 15 120 Stores receiving 11 160 Inspection/Quality control 6 300 Materials handling and dispatch 13 860 The cost drivers (in random order) to be used for the overhead costs are as follows: Orders executed Number of production runs (used twice) Requisitions raised Machine hours The number of requisitions raised on the stores was 120 for each product and the number of orders executed was 126, each order being for a batch of 10 of a product