Use the ABC technique to prepare a revised product cost statement for July 2022 such as Dineo might produce. (25 marks)

Dineo has recently set up a small business, which manufactures three different types of chairs to customer order. Each type is produced in a single batch per week and dispatched as individual items. The size of the batch is determined by the weekly customer order. The three different types of chairs are known as the Comfort, the Recliner and the Kgweetsa. The Comfort is a fully leather-upholstered chair and is the most expensive of the range. The Recliner is the middle of the range chair and has a comfortable leather seat. The cheapest of the range, the Kgweetsa, is purely a wooden chair, but Dineo feels it has great potential and hopes it will provide at least 50% of the sales revenue. Dineo has produced figures for the past month, July 2022 which is considered a normal month in terms of costs: (1) BOU 2022 Page 5 of 9 Degree July - December BMA721 - Business Management Accounting Dineo would like to implement ABC. On this basis she extracted the following information: The overheads included in July's profit statement comprised: Dineo has recently set up a small business, which manufactures three different types of chairs to customer order. Each type is produced in a single batch per week and dispatched as individual items. The size of the batch is determined by the weekly customer order. The three different types of chairs are known as the Comfort, the Recliner and the Kgweetsa. The Comfort is a fully leather-upholstered chair and is the most expensive of the range. The Recliner is the middle of the range chair and has a comfortable leather seat. The cheapest of the range, the Kgweetsa, is purely a wooden chair, but Dineo feels it has great potential and hopes it will provide at least 50% of the sales revenue. Dineo has produced figures for the past month, July 2022 which is considered a normal month in terms of costs: (1) BOU 2022 Page 5 of 9 Degree July - December BMA721 - Business Management Accounting Dineo would like to implement ABC. On this basis she extracted the following information: The overheads included in July's profit statement comprised