Wombat company has identified the following overhead activities, costs and cost drivers for the coming year:
| Activity | Expected costs | Cost driver | Activity capacity |
| Setup costs | $60,000 | No. of setups | 300 |
| Ordering costs | 45,000 | No. of orders | 4,500 |
| Machine costs | 90,000 | Machine hours | 18,000 |
| Receiving | 25,000 | No. of parts | 50,000 |
The following two jobs were completed during the year:
| Job 600 | Job 700 | |
| Direct material | $ 750 | $ 850 |
| Direct labour (50 hours per job) | $ 600 | $ 600 |
| Units completed | 100 | 50 |
| Number of setups | 1 | 1 |
| Number of orders | 4 | 2 |
| Machine hours | 20 | 30 |
| Parts used | 20 | 40 |
The company’s normal activity is 4000 direct labour hours (DLH).
Calculate:
- Cost per unit as per Traditional Costing.
- Cost per unit as per ABC Costing.
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