During the last $20$ years, KL Ltd$.\text{'}$s manufacturing operation has become increasingly automated, with Computer$-$controlled robots replacing operators. KL currently manufactures over $100$ products of varying levels of design complexity. A single plant$-$wise overhead absorption rate, based on direct labour hours, is used to absorb overhead costs.

In the quarter ended March, KL$\text{'}$s manufacturing overhead costs were:

Equipment operation expenses $$125,000$

Equipment maintenance expense $$25,000$

Wages paid to technicians $$85,000$

Wages paid to storemen $$35,000$

Wages paid to dispatch staff $$40,000$

Total $$310,000$

During the quarter, the company reviewed the Cost Accounting System and concluded that absorbing overhead costs to individual products on a labour$-$hour absorption basis is meaningless. Overhead costs should be attributed to products using an Activity Based Costing $($ABC$)$ system, and the following were identified as the most significant activities:

$($v$)$ Receiving component consignments from suppliers

$($vi$)$ Setting up equipment for production runs

$($vii$)$ Quality inspections

$($viii$)$ Dispatching goods as per customers' orders.

$$ Equipment operation and maintenance expenses are apportioned as: Component stores $15\%,$ manufacturing $70\%,$ and goods dispatch $15\%$

$$ Technician's wages are apportioned as: Equipment maintenance $30\%,$ set up equipment for production runs $40\%,$ and quality inspections $30\%.$

During the quarter:

vi$.$ a total of $200$ direct labour hours were worked $($paid at Rs$.12$ per hr$.)$

vii. $980$ components consignments were received from suppliers

viii. $1020$ production runs were set up

ix$.640$ quality inspections were carried out

x$.420$ orders were despatched to customers.

KL$\text{'}$s production during the quarter included components R$,$ S and T$.$ The following information is available:

Component R Component S Component T

Direct labour hours worked $2548050$

Direct material $$1,200$ $$2,900$ $$1,800$

Component consignments received $422428$

Production runs $161812$

Quality inspections $10818$

Orders dispatched $228546$

Quantity produced $56012,8002,400$

Required:

b$)$ Calculate the unit cost of R$,$ S and T and components, using KL$\text{'}$s existing cost accounting system.

Explain how an ABC system would be developed using the information given. Calculate the unit cost of components R$,$ S and T using the ABC system.