The following budgeted information relates to Brunti Inc. for the forthcoming period Products XYI YZT ABW (000) (000) (000) Sales and production (units) 50 40 30 ($) (S) (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 Assembly department (direct labour hours per unit) 7 10 5 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: Quantity for the period Cost pool $000 Cost driver Machining services 357 Machine hours 420 000 Assembly services 318 Direct labour hours 530 000 Set-up costs 26 Set-ups 520 Order processing 156 Customer orders 32 000 Purchasing 84 Suppliers orders 11.200 941 You have also been provided with the following estimates for the period: Required: Products XYI YZT ABW Number of set-ups 120 200 Customer orders 8000 8000 200 16000 Suppliers' orders 3000 4000 4 200 (a) Prepare and present profit statements using: (1) conventional absorption costing (5 marks (ii) activity-based costing (10 marks (b) Comment on why activity-based costing is considered to present a fairer valuation of the product cost per uni (5 marks (Total 20 marks