QUESTION 4: SUPERIOR LTD SUPERIOR Ltd makes shoes in two ranges such as Basic and Super. Information relating to each of these products is set out below: Basic Super Selling price per unit 80 160 Material Cost per unit 10 50 Labour time per unit 2 hrs 3 hrs Labour rate per hour 12 12 Number of Units Produced Each Year 3,000 4,000 Cost Drivers 50 450 20 380 Number of Quality Inspections Number of Sales Invoices Issued each year Number of batches per total production Machine Hours total 4 36 800 7200 The Director of Superior Ltd has produced the following analysis of total overheads per year and their relevant cost drivers: Cost Pool (8) Cost Drivers Quality Inspection 120,000 Number of Quality Inspections Sales Invoicing 60,000 Number of Sales Invoices issued each year Material Handling 80,000 Number of batches per total production 100.000 Machine Hours tota/ Other Overheads 360,000 Required: Calculate full cost per unit and profit per unit for each product using: - Traditional full cost method of overhead absorption (based on direct labour hours) (2 marks) - Activity-based costing (ABC) method. (4 marks) B) Comment on your findings and suggest an action plan accordingly (1 mark)