The following budgeted information relates to Brunti Inc. for the forthcoming period: Products XYI YZT (000) (000) ABW (000) Sales and production (units) 50 40 30 ($) (S) ($) Selling price (per unit) 45 95 73 Prime cost (per unit) 32 84 65 Hours Hours Hours Machine department (machine hours per unit) 2 5 4 Assembly department (direct labour hours per unit) 7 3 2 Overheads allocated and apportioned to production departments (including service cost centre costs) were to be recovered in product costs as follows: Machine department at $1.20 per machine hour Assembly department at $0.825 per direct labour hour You ascertain that the above overheads could be reanalyzed into 'cost pools' as follows: Cost pool Machining services Assembly services Set-up costs Order processing Purchasing Quantity for the period 420 000 530 000 $000 Cost driver 357 Machine hours 318 Direct labour hours 26 Set-ups 156 Customer orders 84 Suppliers orders 11 200 941 520 32 000 You have also been provided with the following estimates for the period: Required: (a) (i) Products XYI YZT ABW Number of set-ups 120 200 Customer orders 8 000 8 000 200 16.000 Suppliers' orders 3 000 4 000 4 200 Prepare and present profit statements using: conventional absorption costing (ii) activity-based costing (5 marks) (10 marks) (b) Comment on why activity-based costing is considered to present a fairer valuation of the product cost per unit. (5 marks) (Total 20 marks)