Please answer this question in complete detail. Also show every steps with proper working of each part and also compare results.

Q5. Company XYZ has 2 fixed price contracts for 2 different clients apart from other contracts. The company has enough capacity for both contracts but is uncertain whether they will be profitable. Customer Bright Dull Component Type AAA BBB Contract Quantity 1,000 unit 2,000 units Material cost/unit $15 $20 Moulding time/batch 5 hours 7.5 hours Batch Size 100 units 50 units Annual Budgeted overheads as follows: Activity Cost Driver Cost driver Cost pool volume/year Moulding Moulding hours 2,000 $150,000 Inspection Batches 150 $75,000 Production Management Contracts 20 $125,000 Labor cost for product AAA is Rs. 10/unit while for product BBB is Rs. 15 per unit. Previously company was using traditional system and Machine hours were used for allocation. Total Machine hours were 700,000/- Product AAA used 400,000 machine hours whereas product BBB uses 300,000 machine hours. Required :- a. Find out cost of both products under Traditional and ABC system and compare the results. (Marks 08) b. Out of Marginal and Absorption costing methods which costing approach is better and why? (Marks 02)