SSHOW CALCULATE IN DETAILED PLS

Office Space plc makes two types of office chair, the Standard and the Deluxe. The Standard is the most popular product and is sold in large numbers. The Deluxe is a more specialised product with a higher number of moveable parts which is sold in smaller quantities. Budgeted details for the two types of office chair are as follows: Standard Deluxe Annual sales Average order size Direct Materials per unit Direct rate per hour Special components per unit Production batch size Set ups per batch Labour hours 250,000 48,000 25 6 15 25 10 10 2 8 1251 20 1 2 0.2 0.5 Overheads Material handling costs Set up costs Special component handling Other overheads 150,000 110,000 1,500,000 125,000 Cost Driver Number of batches Number of set ups No. of special comp. Labour hours Required: a) Calculate the cost per unit of the Standard and the Deluxe office chairs based on ctivity Based Costing techniques. (12 marks) b) Calculate the cost per unit of the Standard and the Deluxe office chairs based on traditional Absorption Costing techniques. (4 marks) c) Discuss the advantages and disadvantages of adopting Activity Based Costing system. an