Tinda Lock Pvt Ltd. manufactures two types of car locks -Ciaz and City and applies overheads

on the basis of direct-labour hours. The budgeted overheads and direct-labour hours for the month

of December, 2020 are Rs.12,42,500 and 20,000 hours respectively. The information about the

Tinda Lock Pvt Lid. manufactures two types of car locks - Ciaz and City and applies overheads on the basis of direct-labour hours. The budgeted overheads and direct-labour hours for the month of December, 2020 are Rs. 12,42,500 and 20,000 hours respectively. The information about the company's products is as follows: Ciaz lock City lock Budgeted production volume Units 2500 3150 Direct material cost Rs. / unit 300 450 Direct labour cost - Ciaz: 3 hours @ 150 per hour Rs. / unit 450 City: 4 hours @ 150 per hour Rs. / unit 600 Tinda's total overheads are Rs. 12,42,500 and can be identified with following three activities: Rs Driver Order processing 210000 number of orders processed Machine processing 875000 machine hours worked Product inspection 157500 inspection hours The data relevant to these activities is given in the following table: Order Machine hour Inspection processed worked hours Ciaz lock 350 23000 4000 City lock 250 27000 11000 Total 600 50000 15000 a Assuming the overheads are applied based on direct labour hours, calculate the recovery rate and compute the per unit cost of both the locks (traditional costing); b Compute the per unit cost of both the locks on the basis of activity based costing; C Analyse under costing and over costing, if any