b) using current system, estimated manufacturing overhead costs per unit are less for the delux door (RM80 per unit) than the standard door (RM 120 per unit).

Provide a short explanation for this phenomenon. (3 marks)

6. Lampung Sdn Bhd produces two types of entry doors: Deluxe and Standard. The assignment basis for support costs has been direct labor dollars. For 2015, Lampung compiled the following data for the two products: Deluxe Standard Sales units 50,000 400,000 RM RM Sales price per unit Prime costs per unit Direct materials cost per unit Direct labor costs per unit Manufacturing support costs per unit 650 180 95 75 80 475 130 75 55 120 Last year, Lampung Manufacturing purchased an expensive robotics system to allow for more decorative door products in the deluxe product line, The CFO suggested that an Activity Based Costing (ABC) analysis could be valuable to help evaluate a product mix and promotion strategy for the next sales campaign. She obtained the following ABC information for 2015: Activity Cost Driver Cost (RM) Total Deluxe Setups of setups 500,000 500 400 Machine-related of machine hours 44,000,000 600,000 300.000 Packing of shipments 5,000,000 250.000 150,000 Standard 100 300.000 200,000 n . 6. Lampung Sdn Bhd produces two types of entry doors: Deluxe and Standard. The assignment basis for support costs has been direct labor dollars. For 2015, Lampung compiled the following data for the two products: Deluxe Standard Sales units 50,000 400,000 RM RM Sales price per unit Prime costs per unit Direct materials cost per unit Direct labor costs per unit Manufacturing support costs per unit 650 180 95 75 80 475 130 75 55 120 Last year, Lampung Manufacturing purchased an expensive robotics system to allow for more decorative door products in the deluxe product line, The CFO suggested that an Activity Based Costing (ABC) analysis could be valuable to help evaluate a product mix and promotion strategy for the next sales campaign. She obtained the following ABC information for 2015: Activity Cost Driver Cost (RM) Total Deluxe Setups of setups 500,000 500 400 Machine-related of machine hours 44,000,000 600,000 300.000 Packing of shipments 5,000,000 250.000 150,000 Standard 100 300.000 200,000 n