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).



  1. Cost per unit as per Traditional Costing.
  2. Cost per unit as per ABC Costing.


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