(a)Calculate the unit cost of jobs Spirit and Telecom under the current costing system. Show all workings.

(b) Determine the unit costs of jobs Spirit and Telecom using activity-based costing. Show all workings.

Petronas Ltd., a chemical products company is currently trialling its product costing system. Currently, all directly traceable costs are assigned to individual jobs. Indirect costs are allocated on the basis of direct labour hours. Petronas has budgeted 4,000 direct labour hours for April at a cost of $20 per hour. The management accountant, in consultation with production supervisors, identified activities that are common to the production of each job, yet are consumed in different amounts. For April, these activities are as follows: Activity Expected Cost Activity Driver Activity Capacity Setting up machines $60,000 Number of set-ups 300 set-ups Maintaining machines $90,000 Machine hours 18,000 machine hours Ordering raw materials $45,000 Number of orders 4,500 orders Receiving raw materials $25,000 Number of parts 50,000 parts The following jobs were completed during April: Spirit Telecom Direct materials $75,000 $85,000 Direct labour hours 2000 2000 Number of units 100 100 Number of set-ups 50 250 Machine hours 6,000 12,000 Number of orders 2,500 2,000 Number of parts 15,000 35,000