(a)[1]
State why cost drivers are used when applying activity based costing (ABC).
(b)[9]
Calculate the selling price for one unit of each product.
(c)[5]
Calculate the change in the selling price of one unit of each product if Sooraj uses machine hours as the cost driver for depreciation cost.
(d)[3]
Explain the link between the choice of cost driver and profit.
(e)[7]
Advise Sooraj whether these components ought to be made in his own factory for Product A. Support your answer. Include any impact on the costs of Product B.