and a sefulness of ABC. Irimake Limited makes three main products, using broadly the same production methods and equipment for each. A conventional product costing system is used at present, although an activity-based costing (ABC) system is being considered. Details of the three products for a typical period are: Hours per unit Materials Labour Machine per unit Volumes hours unit (R) units Product X 1/2 11/2 20 750 Product Y 112 1 12 1,250 Product Z 1 3 25 7,000 Direct labour costs R42 per hour and production overheads are absorbed on a machine hour basis. The rate for the period is R84 per machine hour.