Chopin Company has analyzed its manufacturing process and has determined that there are four overhead activities which affect the process. The following information relates to those activities.

CHOPIN COMPANY MANUFACTURING DATA FOR MANUFACTURING OVERHEAD ACTIVITIES

Activity	Estimated Cost	Activity Cost Driver	Total Cost Driver Usage
Setup	$ 500,000	Number of setups	10,000
Ordering	280,000	Number of orders	20,000
Machining	900,000	Machine hours	60,000
Receiving	200,000	Number of parts	100,000

The company completed two jobs during the month of January.

CHOPIN COMPANY MANUFACTURING INFORMATION FOR JOBS COMPLETED FOR MONTH OF JANUARY

	Job 324	Job 325
Direct Materials Used	$ 25,000	$ 31,000
Direct Labor Hours Used	150	250
Direct Labor Rate Per Hour	$ 11.50	$ 13.00
Units Produced	1,200	1,500
Number of Setups	35	55
Number of Orders Placed	30	60
Machine Hours Used	250	380
Number of Parts Used	1,700	2,500

Currently, the company uses direct materials cost as the application base for manufacturing overhead. The companys normal level of activity is $1,000,000 of direct materials cost per year.

REQUIRED: (1) Compute the total cost and cost per unit for each job using direct materials cost as the application base for applying manufacturing overhead to the jobs. Round all total costs to the nearest whole dollar and all costs per unit to the nearest cent.

(2) Compute the total cost and cost per unit for each job using the four activity cost drivers indicated to apply manufacturing overhead to the jobs. Round all total costs to the nearest whole dollar and all costs per unit to the nearest cent.

(3) Which method do you feel provides a more accurate way of charging manufacturing overhead to the jobs? Explain.