Calculate the product cost and profitability of each of Wayco Leisures three types of product using each of the following methods to attribute overheads: (I) The existing methods based upon labour hours.

information. Direct labour $20 per hour

	Annual Output (Units)	Annual Direct labour hours	Selling price ($ per unit)	Raw material cost ($ per unit)
Getaway	2000	50,000	4,000	400
Relax	1600	55,000	6,000	600
Unwind	400	20,000	8,000	900

The three cost drivers that generate overheads are:

Deliveries to retailers: the number of deliveries of caravans to retail showrooms

Set-ups: the number of times the assembly line process is re-set to accommodate a

production run of a different type of caravan.

Purchase orders: the number of purchase orders.

The annual cost driver volumes relating to each activity and for each type of caravan are as follows:

	Number of deliveries to retailers	Number of set- ups	Number of purchase orders
Getaway	100	35	400
Relax	80	40	300
Unwind	70	25	100

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The annual overhead costs relating to these activities are as follows:

Particulars

Deliveries to retailers

Amount ($)

2,400,000

Set-up costs

6,000,000

Purchase orders

3,600,000