Please present the answer in a tabulated form.

BBS Add On & L$8$

MAT $2024/2025$

CA$2$ ABC Nov $2024(10\%$ of the subject mark$)$

Time allowed; $50$ minutes max

A company is proposing to make $3$ products. The following budgeted production and other information is available for next month.

$\backslash$table$[[$Products$,$X$,$Y$,$Z$],[$Total Units produced,$8,000,12,000,20,000],[$Units per batch,$50,25,250],[$Quality Control Inspections per batch,$12,8,5],[$Direct Materials kgs per unit,$5,4,6],[$Direct Labour hours per unit,$1\mathrm{.}50,2\mathrm{.}50,4\mathrm{.}4225]]$

The same material is used in all the products and costs $30$ per kg $.$ Direct labour costs $40$ per labour hour.

The total budgeted production overhead for the year is $10,436,000$ and the company has traditionally absorbed it into unit costs based on direct labour hours.

A preliminary ABC analysis has suggested the following $2$ cost pools and related cost drivers:

$\backslash$table$[[$ABC Overhead Cost Pool,$lon,$Cost Driver$],[$Materials Handling,$8,280,000,$The number of production batches$],[$Quality Control,$2,156,000,$The number of quality control inspections$],[$Total$,10,436,000,]]$

Required:

Calculate the total production cost of $1$ unit of $Y$ using the company's traditional method of absorbing overhead.

$(18$ marks$)$

Calculate the total production cost of $1$ unit of $Y$ using the ABC method. $(52$ marks$)$

What do you understand by the terms over costing? Is Y over costed$?$

$(5$ marks$)$

From the information in the question $($no additional calculations are required, and your answer cannot be based on additional calculations$)$

Is product $Z$ over or under costed using the traditional method and if so$,$ why.

Give $3$ brief points to support your answer.

$)=(15$ marks

Which method, ABC or Traditional makes it easier for a manger to reduce overheads. Explain briefly.

$(10$ marks$)$