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for each customer? Question 6 Proposed Situation 42 Catalyst Ltd. makes a single product with the following details Description Current Situation Selling Price (/unit) 10 Direct Costs (/unit) 5 Present number of setups per production period, (before each production run, setup is done) Cost per set up (*) 450 Production units per run 960 Engineering hours for production period 500 Cost per engineering hour (*) 10 Decrease by 90 1,008 422 The company has begun Activity Based Costing of fixed costs and has presently identified two cost drivers, viz. production runs and engineering hours. Of the total fixed costs presently at 96,000, after the above, 72,100 remains to be analyzed. There are changes as proposed above for the next production period for the same volume of output. Required (1) How many units and in 'how many production runs should Catalyst Ltd. produce in the changed scenario in order to break-even? (ii) Should Catalyst Ltd. continue to break up the remaining fixed costs into activity based costs? Why? Question 7 Linex Limited manufactures three products P, Q and R which are similar in nature and are for each customer? Question 6 Proposed Situation 42 Catalyst Ltd. makes a single product with the following details Description Current Situation Selling Price (/unit) 10 Direct Costs (/unit) 5 Present number of setups per production period, (before each production run, setup is done) Cost per set up (*) 450 Production units per run 960 Engineering hours for production period 500 Cost per engineering hour (*) 10 Decrease by 90 1,008 422 The company has begun Activity Based Costing of fixed costs and has presently identified two cost drivers, viz. production runs and engineering hours. Of the total fixed costs presently at 96,000, after the above, 72,100 remains to be analyzed. There are changes as proposed above for the next production period for the same volume of output. Required (1) How many units and in 'how many production runs should Catalyst Ltd. produce in the changed scenario in order to break-even? (ii) Should Catalyst Ltd. continue to break up the remaining fixed costs into activity based costs? Why? Question 7 Linex Limited manufactures three products P, Q and R which are similar in nature and are