ABC Enterprises manufacures and distributes three products; A, B, and C. Over the past few years, ABC has gradually automated its operations. As a result, total direct labor hours have substantially declined , while total manufacturing overhead costs have signficantly increased. Because of these changes, ABC wants to evaluate its products costs using Activity-Based Costing procedures. The following information has been gathered from the company's internal records and budgetary system.

A B C

Units produced and sold $5000 2000 1000

Total direct material cost $90,000 50,000 40,000

Total direct labor hours $3600 2000 800

Direct labor rate per hour $9.00

Total manufacturing overhead 290000

Overhead: Number of Events

Activity	Cost Driver	Total cost	A	B	C
Production	no. of parts per unit	150000	20	32	68
set-up	no. of production runs	90000	8	5	3
quality control	no. of insepction points	50000	3	6	11

Required:

a. Calculate product costs for products A, B, and C Using a traditional costing approach using direct labor hours to assign overhead costs to products.

b. Calculate product costs for products A, B, and C using Activity-Based Costing to assign overhead costs to products.