At its manufacturing plant in Adelaide, Exxon Electronics Company manufactures twoproducts, A32 & Y41. For many years, the company has used a simple plantwidemanufacturing overhead cost rate based on direct labour hours. A new plant accountantsuggested that the company may be able to assign overhead costs to products moreaccurately by using an activity-based costing system that relies on a separate rete foreach manufacturing activity that causes overhead costs.After studying the plant’s manufacturing activities and costs, the plant accountant hascollected the following data for the last year.Item A32 Y41Units produced and sold 50,000 100,000Direct labour hours used 100,000 300,000Direct Labour cost $1,000,000 $4,500,000Number of times handled 40,000 20,000Number of parts 12,000 8,000Number of design changes 2,000 1,000Number of product setups 8,000 6,000The accountant has also determined that actual manufacturing overhead cost incurredlast year were as follows:Cost Pool Activity CostsHandling $3,000,000Number of parts $2,400,000Design changes $3,300,000Setups $2,800,000Total $11,500,000The direct material cost for product A32 is $120 per unit, while for product Y41 it is$140 per unit.Required:a) Determine the unit cost of each product using direct labour hours to allocate allmanufacturing overhead costs. (9 marks)b) Determine the unit cost of each product using activity-based costing.(13 marks)c) Which of the two methods produce more accurate estimates of product costs?Why? (6 marks)