Cape Ltd manufactures four products, W, X, Y and Z. Output and cost data for the month of June, are as follows:

Product

Total output (units)

No. of

Production

Run

Material cost per unit

($)

Direct

Labor Hour

(DLH)

Per unit

Machine

Hour (MH)

Per unit

No. of material movements

W

10

2

20

1

1

2

X

10

2

80

2

3

3

Y

100

5

20

1

1

5

Z

100

5

80

2

3

10

Direct labor cost per hour is $5. Overhead costs are as follows:

$

Short-run variable costs3,080

Set-up costs 10,920

Production and scheduling costs 9,100

Materials handling costs 7,700

30,800

Required:

Calculate product costs using the following approaches:

a)Absorption costing (based MH basis)

b)ABC