Unilever Ghana Ltd (UGL) makes three main product lines of soap in batches. The management of UGL is reviewing the cost accounting policy concerning overheads. Currently, the company absorbs overheads based on direct labour hours. Some management board members feel that the company should switch to activity-based costing (ABC) since the product lines demand its overhead resources differently. You have been asked to demonstrate the difference between the existing and the proposed methos of dealing with overheads. The following information is available to assist you:

	Geisha	Sunlight	Lifebouy
Materials (ghc12 per kilo)	36	18	24
Labour (ghc9 per hour)	9	18	13.5
Machine hours per unit	6 minutes	12 minutes	6 minutes
Units per batch	40	60	75
Sales price	63	58	60
Sales demand (units)	3,200	3,600	4,500
Overhead Cost
Machine related	74,500	Driven by machine hours
Quality testing	16,950	Driven by number of units
Machine set up costs	54,350	Driven by number of batches
Material movements	60,000	Driven by number of kilos

You are required to:

Calculate the profit or loss on each product using

The traditional volume-based absorption or application method

Activity-based costing method of absorbing or applying overheads