Chicago Computing Corporation manufactures two remote Internet communication devices: Personal and DeLuxe. Below is the information relative to their costs:

Name of Pool	Dollars in Pool	No. of Drivers	Driver
Purchasing	$1,000,000	10,000	Purch. Orders
Soldering	500,000	100,000	Inches
General Factory	250,000	40,000	Labor Hours
	$1,750,000

Labor rate is $20.00 per hour.

Following is information relative to the two products:

Description	Personal	DeLuxe
Direct Material	500,000	800,000
Number of Units	10,000	5,000
Purchase Orders	6,000	4,000
Inches	50,000	50,000
Direct Labor Hours	25,000	15,000

Required:

1. Compute the total cost of making the personal device and the deluxe device using the single driver approach with labor hours being the cost driver. Also, compute the unit cost of each

device.

2. Compute the total cost of making the personal device and the deluxe device using the ABC approach.

Also, compute the unit cost of each device.

3. What are the three environmental factors that normally exist where a company is using ABC costing? 4. Discuss some of the reasons firms have not adopted ABC costing.