B. Calculate ACG's production cost per unit for both models using ABC coating to the nearest cents C. Discuss the unit cost findings for part A and B and identify the issues that caused the discrepancies and it's implication on AGC pricing decisions and profitability

Al Games Company (AGC) manufactures electronic games targeting the toy market. AGC produces two models, Model T1X, a basic model with basic functions and ModelT2X Plus which offer more functions and options. Top management were concerned that new entrants into this market segment have driven AGC profit margin of their best-selling Model T1X down. Top management was especially concerned that ModelT1X competitor prices were close to AGC production cost per unit for that model. Top management decided to hire an external consultant to evaluate AGC's current traditional costing method based on direct labor hours to apportion manufacturing overhead. Production costs and activities Information concerning the two models is as follows: Model T1X Model T2X Plus Units produced 30,000 units 10,000 units Direct materials RM 60,000 RM 30,000 Direct labor hours 10,000hrs 3,000hrs Direct labor rate/hour RM 10/hour RM 10/hour Engineering time (hours) 1,000hrs 3,000hrs Setups 10 times 30 times Kilowatt hours 5,000 kw 4,000 kw The following were overhead costs incurred: Power Rm 24,000 Engineering Rm 140,000 Setups Rm 120,000 Total RM 284,000 A. Calculate AGC's production cost per unit for Model T1X and Model T2X Plus using Traditional Costing Method based on direct labor hours (to the nearest cents). (4 marks)