A company that does consulting calculates the total cost for doing a job using a combination of the consulting time spent with the client at a rate of $95 per hour, plus overhead allocated at a rate of $20 per consulting hour. The total consulting hours estimated for the year is 5,000 hours. The company is considering using activity-based costing (ABC) to allocate overhead. All overhead costs can be assigned to the following activities: Activity Estimated Activity Activity Rate Travel to jobs 7,500 kilometres (km) $2.50/km Copying 300 copies $15/copy Administration 2,000 administration hours $22/hr The company completed a job for a client using a total of 43 consulting hours. In addition, the job required total travel of 212 kilometres, total administration time of 17 hours, and preparation of three copies. Required: 1. Determine the total cost of the job using the traditional costing system. (2 marks) 2. Determine the total cost of the job using the ABC system. (4 marks) 3. For this job, which method of applying overhead results in a higher profit if the selling price is the same for both methods? How much higher will the profit be? (2 marks) 4. Calculate the price charged to the client for this job if the company uses a 25% markup of the ABC cost. (1 mark) 5. For a manufacturing company, why is ABC usually not acceptable for external reporting that follows Generally Accepted Accounting Principles (GAAP)? (1 mark)