Evaluate and assess the advantages for R Ltd of adopting an activity based costing system in order to enhance performance.

R Ltd produces and sells two different products X and Y. The company currently costs all products that they manufacture using a traditional absorption costing system, however they are now considering using an activity based costing system. . An analysis of the budgeted fixed production overheads for 2021 has been undertaken and the costs for various identified activities are as follows:. £ 000 Machining costs 7,000 Set up costs 12,000 Quality inspections 7,020 Stores receiving 3,480 Stores issues 5,500 The analysis also revealed the following information:. X Y Budgeted production (number of units) 1,100 1,600 Machine hours to make one unit 200 300 Units per production run 10 40 Number of inspections per production run 20 80 Number of component deliveries to stores 492 900 Number of issues from stores 4,000 7,000 Direct cost per product £45,000 £47,500. Task 1. Calculate the budgeted total production cost of one unit of X and one unit of Y using the activity based information provided above. This requires identifying a relevant cost driver and absorption rate for each activity.. Task 2. Evaluate and assess the advantages for R Ltd of adopting an activity based costing system in order to enhance performance. . . Essay shall not exceed 1000-1100 words in total, excluding References.. Detaidfpls are in the attached file.