Revision Question 1-Decision Making & ABC Egerton Manufacturing Co produces a range of products at seven separate sites. Each site produces a maximum of four products. The directors have decided to introduce Activity Based Costing (ABC) and have asked each site manager to obtain and analyse the relevant data for their site. Product costs are currently calculated using absorption costing, with overheads being absorbed on a machine hour basis. As part of the process of introducing ABC, the directors wish to assess the profitability of individual products, with the possibility that the product range may be reduced. You are the Manager of the Brumley. site and you have obtained the following data: Product Selling price per unit Direct material per unit Direct labour per unit Overheads per unit Total cost per unit 300.00 530.00 67.00 54.00 435.00 98.00 57.00 55.00 41.00 200 units 0.6 25 15 16 400 units Budgeted production volume 600 units Machine hours per unit Production runs per period Number of sales orders Number of deliveries of material 0.6 40 5 2 19 The budgeted overheads of the site for the period are $78,560 $82,900 $49,500 Machine running costs Set up costs Material handling costs Machine hours are limited to 1,140 per period. Required a) Calculate the cost of each product using ABC. b) Using the ABC information indicate which product(s) should no longer be manufactured and justifies your recommendation. c) Discuss other factors that should be considered before a final decision is made