29Holbrook Ltd has identified the following overhead costs and cost drivers for next year.

Overhead Item	Expected Cost	Cost Driver	Expected Quantity
Setups costs	$960,000	Number of setups	4,800
Ordering costs	$160,000	Number of orders	20,000
Maintenance	$640,000	Machine hours	64,000
Power	$80,000	Kilowatt hours	200,000

The following are two of the jobs completed during the year.

	Job 701	Job 702
Prime cost (Raw materials & Direct labour)	$25,000	$18,000
Units completed	650	500
Direct labour hours	180	220
Number of setups	12	15
Number of orders	16	30
Machine hours	360	300
Kilowatt hours	180	650

The companys normal activity is 40,000 direct labour hours.

Required:

(a) Calculate the pre-determined overhead rate if the company uses direct labour hours to allocate overhead costs. (2 marks)

(b) Determine the unit cost for job 702 using direct labour hours to apply overhead. (4 marks)

(c) Determine the unit cost for job 702 using the four cost drivers. (10 marks)

(d) Briefly describe two costs and two benefits of adopting an ABC system (one sentence each). (4 marks)