NutritionCrunch Pvt. Ltd. is a fast-growing company in the health food industry, specializing in the production of nutritious snack bars. The…

NutritionCrunch Pvt. Ltd. is a fast-growing company in the health food industry, specializing in the production of nutritious snack bars. The company manufactures three popular variants—Alpha, Beta, and Gamma—in a fully automated production facility. Due to increasing competition and pressure on margins, management has become concerned that the existing conventional costing system, which allocates overheads simply based on units sold, may not be accurately reflecting the true cost and profitability of each product. To improve cost accuracy, the company is considering the adoption of an Activity-Based Costing (ABC) system, which allocates overheads based on actual resource consumption such as inspection hours, machine usage, and special activities like packaging and advertising. The following data has been compiled for analysis for one month: Overheads (Per Month) Inspection Cost = ₹84,000 Machine Repairs & Maintenance = ₹1,56,000 Mold (Dye) Cost = ₹14,500 Total Selling Overheads = ₹1,80,000 Product Data Particulars Alpha Beta Gamma Prime Cost per unit (₹) 14 10 9 Selling Price per unit (₹) 22 16 13 Units per Production Run 2,440 3,020 3,220 Defective Units per Run 40 20 20 Inspection Hours per Run 2 5 3 Mold Cost per Run (₹) 300 400 350 Machine Hours per Run 25 15 35 Units Sold per Month 24,000 60,000 32,000 The following Additional Information is provided: The company follows a just-in-time approach, meaning all non-defective units produced are sold during the same month. There is no opening or closing inventory. Under the current system, all production and selling overheads are allocated purely based on the number of units sold, without considering the actual consumption of resources by each product. Out of total selling overheads, ₹90,000 relates to advertising expenses, which are incurred only for Beta and Gamma, as these products face stiff competition in the market. Alpha does not require advertising due to its established demand. Product Beta requires special packaging to maintain its competitive position. A cost of ₹60,000 per month is incurred exclusively for this purpose and is included in the total selling overheads. As a production cum finance manager of the company, you are required to answer the following questions: