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    Answers

    ii Estimated unit cost of the proposed new product under activity based costing per unit Direct material 4 kg per unit at 5 00 per kg 20 00 Direct labour 0 5 hour per unit at 10 00 per hour 5 00 Direct other expenses 2 00 –––––– Variable cost per unit 27 00 Overheads Drilling cost 2 drilling operations at 0 50 each 1 00

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