Activity-Based Costing Q5. Having attended a Management Accounting course on Activity-Based Costing (ABC), you decided to apply the principles of ABC on the four products currently made and sold by your company. Details of the four products and relevant information are given below for one period: Products 80 120 Output in units Costs per unit 120 100 . Direct material Direct labor $40 $28 $50 $21 $30 $14 $60 $21 Machine hours (per unit) The four products are si in batches of 10 units. The production overhead is currently applied by using a machine hour rate, and the total of the production overhead for the period has been analyzed as fol lows: Machine department costs (rent, depreciation, and supervision) Set up costs Store receiving Inspection/Quality control Materials handling and dispatch Overhead Cost $10,430 $5,250 $3,600 $2,100 $4,620 $26,000 You have ascertained that the cost drivers to be used are listed below for the overhead costs shown Cost Machine department costs Set up costs Stores receiving Inspection/Quality control Materials handling and dispatch Cost Driver Machine hours Number of production runs Requisitions raised Number of production runs Orders executed The number of requisitions raised on the stores was 20 for each product and the number of orders executed was 42, each order being for a batch of 10 of a product