Question 2 (11 marks) a) Discuss the circumstances that would require a business to change from traditional costing to ABC costing? (2 marks) b) M Co. Ltd has traditionally allocated its overhead based on machine hours but had collected this information to change to activity-based costing: Estimated Activity Activity Center Product 1 Product 2 Estimated Cost Machine setups 15 45 $ 10,800 Assembly parts 3,000 3,000 144,600 Packaging pieces 500 400 55,350 Machine hour per unit 4 3 Production volume 750 1,500 Required: i) How much overhead would be allocated to each unit under the traditional allocation method? (2 marks) ii} How much overhead would be allocated to each unit under activity-based costing? (5 marks) iii) Would you recommend a change to ABC costing for this company? Justify your answer (2 marks)