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Question 3: Activity-Based Costing (35 Marks) Super Shoe company makes two types of shoes-the Runner and the Comforter. Data concerning these two product lines appear below: Runner Comforter Selling price per unit $200.00 $100.00 Direct materials per unit $80.00 $60.00 Direct labour per unit $30.00 $20.00 Direct labour-hours per unit 2.0 DLHs 1.0 DLHS Estimated annual production and sales 40,000 units 160,000 units Estimated direct labour hours ? ? The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead for the upcoming year appear below: Activities and Activity Measures Estimated Overhead Cost Supporting direct labour (direct labour-hours) $810,000 Batch setups (setups) 500,000 Product sustaining (number of products) 670,000 Other (organization-sustaining costs) 120,000 Estimated manufacturing overhead cost $2,100,000 Question 3.6 Which allocation system do you recommend to the managing director and why? [Word limit: 150 words. Note the word count at the end of your answer.] (5 marks) Word count= Activities and Activity Measures Supporting direct labour (direct labour-hours) Batch setups (setups) Product design (number of designs) Other Expected Activity Runner Comforter 80,000 160,000 300 100 03 02 NA NA