) Time Remaining Score Question 1 (20 marks) Star Peripherals Lid manufactures two different multifunction printers (MFPs) for the business market. Information of the two models of products is available as follows: Basic Model Advanced Model Direct material $800 $1,600 Direct labour 300 600 Labour hours per unit 10 hours 20 hours Units produced 3,000 units 500 units The total manufacturing overhead for the whole plant is estimated at $1,600,000. In the current year, the company is using the traditional costing system which allocates manufacturing overhead to the products based on a plantwide overhead rate per direct labour hour. From next year onwards, the company has planned to implement an activity-based costing system to allocate its manufacturing overhead costs to the products. The activity cost pools identified and the activity driver data are estimated as follows: Activity drivers Activity cost pool (cost driver) Activity costs Basic model Advanced mode $ Machine setup (no. of setups) 300,000 50 setups 150 setu Material receiving (kgs of materials) 180,000 30,000 kgs 50,000 Inspection (no. of inspections) 160,000 700 inspections 900 inspecti Machinery-related (machine hours - MH) 960,000 20,000 MH 40,000 hp port sc delete U O P K pause N M ctrisheral, handas ) The Room ing Show The total manufacturing overhead for the whole plant is estimated at $1,600,JUU. in the current year, the company is using the traditional costing system which allocates manufacturing overhead to the products based on a plantwide overhead rate per direct labour hour. From next year onwards, the company has planned to implement an activity-based costing system to allocate its manufacturing overhead costs to the products. The activity cost pools identified and the activity driver data are estimated as follows: Activity drivers Activity cost pool (cost driver) Activity costs Basic model Advanced model S Machine setup (no. of setups) 300,000 50 setups 150 setups Material receiving (kgs of materials) 180,000 30,000 kgs 50,000 kgs Inspection (no. of inspections) 160,000 700 inspections 900 inspections Machinery-related (machine hours - MH) 960,000 20,000 MH 40,000 ME Total manufacturing overhead 1,600,000 Required: (a) Calculate the costs per unit of the two products using the two costing systems: (i) Traditional costing system (ii) Activity-based costing system (16 marks) hp Port sC delete S P U O H J K pause N M strTime Remaining Show Machine setup (no. of setups) 300,000 50 setups 150 setups Material receiving (kgs of materials) 180,000 30,000 kgs 50,000 kgs Inspection (no. of inspections) 160,000 700 inspections 900 inspections Machinery-related (machine hours - MH) 960,000 20,000 MH 40,000 MH Total manufacturing overhead 1,600,000 01 Required: (a) Calculate the costs per unit of the two products using the two costing systems: (i) Traditional costing system (ii) Activity-based costing system (16 marks) (b) Based on your calculations in (a) above, explain which product is overcosted and which product is undercosted using the traditional costing system AND briefly discuss the impact of product overcosting and undercosting to the organisation. (4 marks) B I A X X QEE 4 6 % hp Port sc delete C U O P H J K paus N M ctrl