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Question 2 : Question B1 Plutarch plc manufactures four products. Output and cost details for a given control period are highlighted below: Product Output (units) Number of production runs Material cost per unit (E) Direct labour hours per unit Machine hours per unit P 20 4 50 4 4 B 20 4 60 2 2 400 10 30 1 1 D 400 20 50 2 2 38 Direct labour cost per hour is 9.00 Overhead costs: Short-run variable costs 5,280 Set-up costs 21,850 Production and scheduling costs 18,620 Material handling costs 14,440 Required: (a) Calculate the product costs for the period, using the ABC methodology, clearly [11] stating any assumptions regarding the choice of cost drivers. (b) Outline the key advantages that ABC has over traditional absorption costing. [9] Direct labour cost per hour is 9.00 Overhead costs: Short-run variable costs 5,280 Set-up costs 21,850 Production and scheduling costs 18,620 Material handling costs 14,440 Required: (a) Calculate the product costs for the period, using the ABC methodology, clearly [11] stating any assumptions regarding the choice of cost drivers. (b) Outline the key advantages that ABC has over traditional absorption costing. [9] ( You need to identify appropriate cost driver Think about short run variable cost. If no information is available best driver will be machine hours. Similarly for set up cost will production run.) Make sure you write answer for advantages ABC has over absorption costing it is for 9 marks Foc Kingdom) 12,236 W A O