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|
|Number of setups||1||1|
|Number of orders||4||2|
The company’s normal activity is 4000 direct labour hours (DLH).
- Cost per unit as per Traditional Costing.
- Cost per unit as per ABC Costing.
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