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Cancun Kitchen (Pty) Ltd (Cancun) was started by a Mexican immigrant who moved to Durban, South Africa from Cancun, Mexico. The entity manufactures three Mexican products at its factory in Durban, namely tortilla chips, tortilla wraps and taco shells, which are used by customers to make nachos, burritos, and tacos respectively. All products go through a similar manufacturing process, namely the mixing of ingredients, such as flour, water and spices, baking, cutting, packaging, and storage. The following information is available on the products for October 2022: Products Tortilla chips Tortilla wraps Taco shells Unit type Bag Packet Box Units manufactured / produced 5 000 10 000 3 000 Output per production run 500 bags 500 packets 100 boxes Inspections per production run 3 2 3 Number of orders 100 80 60 Direct material per unit R6 R12 R10 Direct labour per unit R4 R5 R6 Machine hours per unit 2 1 2.5 The total manufacturing overheads for the month are as follows: Manufacturing Overhead R Machine department costs 49 500 Set-up costs 9 000 Inspection and quality control costs 50 000 Materials handling and dispatch 24 000 Total cost 132 500 3 HMAC230-1-Jan-June2023-SuppSA1-V2-BL-19052022 The following cost drivers have been identified for each of the overheads: Manufacturing Overhead Cost Driver Machine department costs Machine hours Set-up costs Production runs Inspection and quality control costs Number of inspections Materials handling and dispatch Number of orders REQUIRED: 1.1. Calculate the total cost of tortilla chips for Cancun Kitchen (Pty) Ltd for October 2022 if activity-based costing is used to assign manufacturing overheads to products. Clearly show all calculations. (31 marks)

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