Version:$0\mathrm{.}9$ StartHTML:$0000000105$ EndHTML:$0000011891$ StartFragment:$0000000141$ EndFragment:$0000011851$ Frosty Delights Ltd$.$ is a family$-$owned business that has been delighting customers with its high$-$quality ice cream for over $15$ years. Based in a bustling town, the company produces two distinct types of ice cream: Joyful Swirl and Luxe Delight. Joyful Swirl features classic, beloved flavours, while Luxe Delight offers gourmet options with unique ingredients and textures, appealing to customers who crave a more indulgent treat. Frosty Delights Ltd$.$ operates a modern ice cream production facility with advanced machinery, such as ice cream mix pasteurizers and packaging machines, to ensure efficiency and consistency in their products. The company relies heavily on accurate product costing to set the selling price for each of its products. The cost of production directly influences the pricing strategy, ensuring that each product is competitively priced while maintaining profitability. Currently, Frosty Delights Ltd$.$ applies overhead costs using a normal costing system, allocating manufacturing overhead based on machine hours. However, Ms$.$ Betty, the financial controller, has realized that this approach may not be accurately reflecting the true cost of each product. After hearing about the potential advantages of Activity$-$Based Costing $($ABC$),$ Ms$.$ Betty is considering a shift to this system. She is now preparing to present this proposal to the management team, outlining the benefits and challenges of adopting an ABC system. Below is the production data for the Joyful Swirl and Luxe Delight lines for the year $2025$: Joyful Swirl Luxe Delight Direct material cost $($per bucket$)$ $$4\mathrm{.}50$ $$8\mathrm{.}00$ Direct labour cost $($per bucket$)$ $$4\mathrm{.}00$ $$4\mathrm{.}00$ Budgeted volume $($buckets$)200,000250,000$ The management accountant has identified three key activities driving overhead costs: ice cream mixing, packaging, and distribution. The data on cost drivers for these activities is shown below: Activities Cost Driver Joyful Swirl Luxe Delight Ice cream mixing Number of Mixings $100150$ Packaging Machine hours $20,00030,000$ Distribution Outgoing shipments $120130$ The company$$s total overhead of $$4,500,000$ is divided into the following categories: Ice cream mixing $($$$1,800,000),$ packaging $($$$1,575,000),$ and distribution $($$$1,125,000).$QUESTION FOUR $($cont$$d$)$ REQUIRED: A$.$ Calculate the overhead cost per unit for each product line $($Joyful Swirl and Luxe Delight$)$ using Frosty Delights Ltd$.$ current costing system. B$.$ Calculate the overhead cost per unit for each product line $($Joyful Swirl and Luxe Delight$)$ using the Activity$-$Based Costing $($ABC$)$ system for Frosty Delight Ltd$.$ C$.$ Determine whether the current costing system has undercosted or overcosted the products. D$.$ Based on the data provided, help Betty persuade the board of directors by identifying at least two $(2)$ pros and two $(2)$ cons of utilizing the ABC system. Additionally, provide a recommendation $($with justification$)$ on whether the company should adopt ABC.