Hi, please help me with the activity based costing question above as well as the answer to the process costing question.

National University of Science and Technology Due Date September Question 1 [25 marks] Numan Travel Ltd started trading 10 years ago as a rafting company. Since then it has expanded to offer three different types of holiday: Best beaches, Cosy cottages and Great golfing. The following analysis was performed recently Number of Number Number Number Number of marketing of reps per of hotels of reservations/ staff hotel as % used customers bookings Best beaches 30 1.0 192 950 000 375 000 Cosy cottages 20 0.5 770 725 000 250 000 Great golfing 18 0.5 192 150 000 25 000 Rafting 6 175 000 175 000 Total 74 1 154 2 000 000 825 000 Last year the founder of the business relinquished the position of managing director and became executive chairman. His replacement as MD has suggested that \" the future of the company lies in expanding golf sector\". Also because the cheap rafting market is becoming increasingly competitive he suggests that the company withdraws from this sector. Further analysis reveals the following information: Best beaches Cosy cottages Great golfing Rafting Total $000 $000 $000 $000 $000 Contribution 37 500 30 000 3 500 14 000 85 000 Advertising 15 000 15 000 2 000 3 500 35 500 Administration 18 000 12 000 1 200 8 400 39 600 Profit 4 500 3 000 300 2 100 9 900 The contribution is the sales revenue for each brand less the variable costs of operating the brand. Advertising costs are allocated directly to each brand but administration costs have been attached to brands on the basis of the number of reservations. The chairman feels that the MD's strategy is mistaken but does not wish to appear to be heavy headed on the basis of nothing more than an instinctive response. His last major act as MD was to instigate a pilot activity based costing system to run in parallel with their existing absorption system. He wonders if this will provide him with a more convincing argument. So far the pilot has produced the following activity analysis of the indirect administration costs. $000 20 000 10 000 6 000 Reservations/ bookings Holiday repping Holiday liaison/contracting Page 1 of 3 Marketing 3 600 39 600 Required (a) Explain the concept of activity based costing and also discuss the benefits that may arise from introducing the ABC for the allocation of overhead costs. [5] (b) Calculate the profit made by each brand using activity based costing. [17] (c) Comment on the results [3] Assignment Two The following information has been provided at 31 March 2015 Dr $ Process 1 (materials $4 400 conversion $3 744) 8 144 Process 2 (process 1 $4 431 conversion $5 250) 9 681 Abnormal loss 1 400 Overhead control a/c Abnormal gain Sales Cost of sales 442 500 Finished goods stock 65 000 Cr $ 250 300 585 000 The company uses the weighted average method of accounting for WIP During April 2015 the following transaction occurred Process 1 material input 4 000 kg Labour cost Transfer to Process 2 2 400kg Process 2 Transfer from process 1 2 400 kg Labour cost Transfer to finished goods 2 500 kg Overhead cost incurred amounted to $54 000 Sales to customers were $52 000 $22 000 $12 000 $15 000 Overhead are absorbed on the basis of 150% of labour cost The losses that arise in process 1 have no scrap value ,those arising from process 2 can be sold for $2 per kg. Details of opening and closing stock for the month of April are as follows Process 1 Opening Closing 3 000 kg 3 400 kg Page 2 of 3 Process 2 2 250 kg 2 600 kg In both processes closing stock of WIP is fully complete as to material cost and 40 % complete as to conversion cost Stock of finished goods was valued at $60 000 A normal loss of 10% of input is expected in each process. Required Prepare the process 1 and 2 accounts for April Page 3 of 3