QUESTION $3$

$(20$ MARKS$)$

REQUIRED

Study the information provided below and calculate the following:

$3\mathrm{.}1$ The unit manufacturing cost per product using the traditional absorption costing system.

$(8$ marks$)$

$3\mathrm{.}2$ The manufacturing overhead cost per product using the Activity$-$Based Costing system.

$($Your answer must include the calculations of the activity rates.$)$

$(12$ marks$)$

INFORMATION

Jupiter Ltd manufactures two products, viz. Product $x$ and Product $Y.$ The company used the absorption costing system by gathering all the overheads in a single cost centre and then allocating it to products using direct labour as allocation basis. The enterprise intends changing to the Activity$-$Based Costing $($ABC$)$ system. The budgeted information for $2025$ is as follows:

$\backslash$table$[[$Costs$,$Product X$,$Product Y$,$Total$],[,$R$,$R$,$R$],[$Direct materials cost,$1000000,2000000,3000000],[$Direct labour costs,$500000,1500000,2000000],[$Manufacturing overheads:,,,$],[$Machine set$-$ups,,,$400000],[$Design costs,,,$600000],[$Materials handling,,,$100000],[$Materials procurement,,,$80000]]$

$\backslash$table$[[$Operating information,Product $x,$Product $Y$