Delicious Ltd manufactures custom made "chocolate bars" for special occassions such as weddings, graduations etc. In 2019 the company had two types of products on the market, the"Longchoc"which sells for $230 and the"Minichoc"which sells for $210. The company currently uses a traditional costing system and allocates overhead costs based on an estimated 80,000 direct labour hours. The following cost information has been used as a basis for pricing decisions over the past year.

Per-unit data

• Longchoc Minichoc

Direct labour hours

1.5

1

Direct labour cost per hour

$13

$14

Number of units produced

35,000

25,000

Direct materials

$85

$40

Number of Events

Activity centre

Cost driver

Traceable

costs $

Longchoc

Minichoc

Mixing

Mixing hours

$100,000

100

100

Design

Design hours

$364,000

800

200

Assembly of Chocolate Bar

No of orders

$900,000

20,000

30,000

Moulding/Shaping

Number of orders

$300,000

9,000

1,000

Total manufacturing overhead costs

$1,664,000

The new company Management Accountant is considering the use of Activity Based Costing to apply overhead and has collected the following data:

a. Using the traditional costing system, calculate the company's predetermined overhead rate.

b. Calculate the total product cost per unit of both productsusing the traditional overhead allocation rate calculated in part

c. Calculate the overhead activity rate for each activity centre using the Activity Based Costing (ABC) approach

d. using an Activity Based Costing (ABC) approach, calculate the total product costs ofone unitof Longchoc andone unitof Minichoc.

e.Calculate the operating profit per unit for Longchoc and Minichoc under, the

1.A traditional costing system and

2.The ABC system