A manufacturing company has two Divisions: Amateur and Pro. Estimated activity for the next year is:

Amateur Pro Company Total

Division Division (Amateur + Pro)

Direct Labour hours: 9,000 hrs 1,000 hrs 10,000 hrs

Maching Hours: 2,700 hrs 600 hrs 3,300 hrs

Units Produced: 800 units 100 units 900 units

Production Batches: 1 batch 49 batches 50 batches

Costs: Labour: $144,000

Set-ups: $ 7,500

Machining: $ 33,000

Total costs: $184,500

Other information:

• The Amateur division makes products on a continual basis throughout the year.
• The Pro division makes products in batches based on demand.
• Both divisions use the same machines and the same employees.
• There are no materials.
• A set-up is required for each production batch.
• Machining costs are allocated based on Machine hours.

Required

1. What is the cost of a unit for each of the Amateur and Pro Divisions, assuming that total costs are captured in a single cost pool allocated on the basis of Direct Labour Costs (ie, no ABC)?

2. What is the cost of a unit for each of the Amateur and Pro Divisions, assuming that the company uses Activity Based Costing?