Question 1 Activity-based Costing (TOTAL: 20 marks) Part A Hardwood Limited has an activity-based costing system with three activity cost pools: Processing, Setting Up, and Other. Costs in the Processing cost pool are assigned to products based on machine-hours (MHs) and costs in the Setting Up cost pool are assigned to products based on the number of batches. Costs in the other cost pool are not assigned to products. Data concerning the two products and the company's costs and activity-based costing system appear below: Activity cost pools: Processing $12,200 Setting up $25,100 Other $17,700 MHs Product Red Product Blue Total Batches 2,400 17,600 20,000 700 300 1.000 Product Red Product Blue Sales (total) $135,700 Direct materials (total) $61,700 Direct labour (total) $52,200 $98,000 $31,000 $45,800 Determine the product margins for each product using activity-based costing. Show your calculations