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QUESTION 4-(16 Marks) (19 Minutes) Mmampudi (Pty) Ltd ("Mmampudi") produces two special products, namely: SR5 and TM8

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QUESTION 4-(16 Marks) (19 Minutes) Mmampudi (Pty) Ltd ("Mmampudi") produces two special products, namely: SR5 and TM8. The company uses activity-based costing. An equipment set-up is made for every 150 units of SR5 and for every 120 units of TM8. If a traditional costing system was used, fixed manufacturing overheads would be based on budgeted production of 150 000 units per year, of which 90 000 units are SR5 and 60 000 units are TM8 The following budgeted information is available for the year ended 31 December 2022 Expected annual fixed manufacturing overheads and activities involved: Cost- and operational Information: SR5 product type TM8 product type Total machine time 2 000 hours 3 000 hours ? ? ? ? Equipment set-ups Unidentified Direct material (cost per unit) Direct labour (cost per unit) R7 R9 R6 Expected annual fixed manufacturing overheads and activities involved Activity Machine usage Setting up of equipment Unidentified Total Cost drivers Machine hours Number of equipment set-ups ? R 200 000 38 500 75 000 313 500 Marks (7) (9) REQUIRED (a) Calculate Mmampudi (Pty) Ltd's activity rates for all the activities for the year ended December 2022 (b) Using your answer in (a) above, calculate the budgeted total annual manufacturing cost per product type. (c) Mention which one between a traditional costing system and an ABC system will most likely result in more accurate product costing in organisations facing intense global competition, with pressure on prices and quality, and briefly motivate your answer. (Hint provide two reasons) TOTAL (3) 19