Case Application 2: (31 marks) Hape Ltd manufactures two types of industrial product, Melissa and Mamamemo. The company's manufacturing details for the current year is as follows: Estimated Manufacturing overhead Budgeted volume activity cost Cost driver used for cost driver Machining 488,000 Machine hours 5,000 hours Production set-up 85,000 No. of set-up 100 set-ups Order handling 162,000 No. of orders 36 orders All the two products were manufactured during June and direct labour is paid $30 per hours. The material and labour requirements for each product is summarised in the table below:- Melissa Mamamemo Units produced 500 300 Direct material $12,750 $8,250 Direct labour hours 1,000 900 Machine hours 1,500 300 Production set-ups 30 6 No. of orders 8 3 The budgeted labour for the current year is 2,940,000 hours. Required: (a) Determine the unit cost for each product if single plant-wide rate is used to allocate overheads based on the basis of labour hours. (7 marks) (b) Compute the unit cost for each product under activity based costing (ABC) system. (12 marks) (c) Comment on the costs allocated to Melissa and Mamamemo under both costing systems in parts (a) and (b) above. Identify the pros and cons for the both costing systems and how they give some impacts to the decision making process in the pricing stragegy of the company (300-400 words) (12 marks) Keep your intermediate and final answers to full decimal places where applicable