Hinj Ltd manufactures and sells four products: arms, brackets, clips and D-rings. This year, for the first time, it is operating an activity-based costing system in parallel with its long-standing absorption costing system (which absorbs overheads on a machine hour basis).The planned production activity cost pools and cost driver activity levels for all the output for the year are as follows:

An analysis of actual annual production output for two of the products is as follows:

Tasks:1.  Calculate the production cost per unit for arms and brackets using the machine hour overhead absorption rate.2.  Calculate the production cost per unit for arms and brackets using the activity-based costing system.3.  Comment on your findings.