Rey has produced the following information regarding the three gym sets they are proposing to introduce: Budget Gym Set Standard Gym Set Luxury Gym Set Production (Units) 30,000 36,000 24,000 Material Usage (kg) per Unit 2 3.5 5 Direct Labour Hours per Unit 0.2 0.4 0.8 Machine Hours per Unit 0.4 0.6 1 Number of Production Runs per Annum 20 30 15 Number of Purchase Orders per Annum 30 36 22 Number of Deliveries to Retailers per Annum 50 30 20 The materials cost an average of 0.90 per kg. The labour rate is 12.50 per labour hour. Rey has the following costs associated with producing the gym sets: Machine Set Up Costs 31,500.00 Machine Running Costs 120,550.00 Procurement Costs 84,000.00 Delivery Costs 110,250.00 To help with pricing these sets, Rey has decided to add a 100% mark up from cost. Please turn over for the Questions for Question 1. Page 4 of 9 Questions: a) Calculate the cost of each product using a Traditional Blanket method to allocate the overheads. Rey typically allocates overheads using Direct Labour hours. (4 marks) b) Recalculate the cost of these products using an Activity Based method to allocate the overheads. (11 marks) c) Critically evaluate the Traditional (Blanket) method and the ABC method of allocating costs. You may use these calculations to support your answer. (15 marks) d) Provide a recommendation for Rey on which costing method they should utilise for these new products with at least ONE explanation/justification for your recommendation. (