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QUESTION 1 (20 MARKS Mypuk Sdn. Bhd. manufactures thee (3) products P Q and R. Forecasting data shows quantity to be manufactured for each type of product for next year is 1500, 5100 and 900 units respectively. The company has a simple raditional overhead system that it uses for al decision making. All overhead cost is currently charged to products using overhead rate based on machine hour Table I shows manufacturing requirements for each product in vedet to fulfit next year's demand Direct labour cost is RM5.50 per hour and direct material cost is RM3.50 per kg Table 2 shows estimation total overhead cost and quantity of activity levels for each cout driver Requirement of quantity level activity for each product type is shown in Table Table 1: Manufacturing requirements per unit product Resources Product Direct manal Type (hour Machine (hour) 22 15 1.2 Direct labour P O R 25 35 40 (kg 25 40 60 Table 2. Estimation total overhead cost for cach cost dhe Types of cost driver Number of Number of Number of set up production runs orders Overhead cost RM) 170.000 320,000 400.000 Table 3. Requirement of quantity leve activity for each product type Product Types of cost driver Number of Number of Number of type productions anders P 129 rue 100 orders O 20 units 176 runs 350 orders R Sunits 95 runs 50 orders TOTAL 34 units 400 runs 500 orders note Calculate your answer with two decimal points Based on the given data, (a) Determine the total cost for manufacturing 1500 units product P, 5100 units produto and 900 units of product based on machine hout using a traditional overhead method. (7 marks) (b) If the company is to me Activity Based Costing method (ABC), calculate the cost driver rate for each activity (0) Analyze the data provided and determine the total cost per unit for cach product using Activity Based Costing (ABC) method Compare the percentage difference of total cost per unit for traditional and ABC method for product and R (2 marks) () Analyse the results in (c) and comment on the reason for the differences in the results from traditional and Activity Based Costing methods (2 marks)

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