Speedo Co. assembles three types of motorcycle at the same factory: the 50cc Fast; the 250cc Quickie and the 1000cc Zoom. It sells the motorcycles throughout the world. In response to market pressures Speedo Co. has invested heavily in new manufacturing technology in recent years and, thus, has significantly reduced the size of its workforce. Historically, the company has allocated all overhead costs using total direct labour hours, but is now considering introducing Activity Based Costing (ABC). Speedo Co's accountant has produced the following analysis. Annual output Annual direct Selling price Raw material (units)l 2000 labour hours (Sper t) 4,000 cost S per unit) Fast Quickle Zoom 200,000 220,000 80,0006.000 8,000 400 600 900 400 The three cost drivers that generate overheads are Deliveries to retailers - the number of deliveries of motorcycles to retail showrooms Set-ups-the mumber of times the assembly line process is re-set to accommodate a production run of a different type of motorcycle Purchase orders - the number of purchase orders. The annual cost driver volumes relating to each activity and for each type of motorcycle are: Number of deliveries to Number of set-ups Number of purchase retallers 100 Fast Quickie80 35 40 25 orders 400 300 100 Zoom The annual overhead costs relating to these activities are as follows Deliveries to retailers 70 2,400,000 Set-up costs 5 le BRGA 8Verhead costs relating to these activities are as follows: Deliveries to retailers Set-up costs Purchase orders 2,400,000 6,000,000 3,600,000 All direct labour is paid at $5 per hour. The company holds no inventories Required Calculate the total profit on each of Speedo Co's three types of product using each of the following methods to attribute overheads: (i) the existing method based upon labour hours (i) activity based costing. (4 marks) (6 marks) (10 mar