QUESTION $3(30$ MARKS$)(54$ MINUTES$)$

Stone Manufacturing Ltd $("$Stone$")$ produces three high$-$end items: Agate, Beryl, and Citrine. The firm uses activity$-$based costing. Each order is fulfilled after two equipment set$-$ups are completed.

Product and Cost Information

$\backslash$table$[[,$Agate,Beryl,Citrine$],[$Total inspections,$50,40,30],[$Total equipment set$-$ups,$20,30,50],[$Units produced and sold,$2,000,4,000,3,000],[$Direct material $($per unit$),$R$100,$R$70,$R$90],[$Direct labour $($per unit$),$R$60,$R$40,$R$50]]$

Overhead Costing Information

Inspection cost: R$600,000$

Equipment set$-$up cost: R$400,000$

Ordering cost: R$300,000$

$\backslash$table$[[$REQUIRED$,$Marks$],[],[($a$)$ Categorise the costs of Stone in as much details as possible.,$(5)],[($b$),$Calculate the activity rates for quality inspections, set$-$ups, and orders.,$(5)],[($c$),$Calculate the total manufacturing cost per product, and the cost per unit for Agate, Beryl, and Citrine.,$\backslash$table$[[(17)],[(3)]]],[($d$),$Organisations face intense global competition and pressure on prices and quality. Briefly discuss which system between traditional and ABC costing systems, will most likely result in more accurate product costing. Motivate your answer.,$]]$