Example 2 Wombat company has identified the following overhead activities, costs and cost drivers for the coming year: Activity Expected Cost driver Activity cost capacity Setup costs $60000 Number of setups 300 Orderingmsts 45 000 Number of orders 4 500 Machine costs 90 000 Machine hours 18 000 Receiving 25 000 Number of parts 50 000 The following two jobs were completed during the year (amongst other jobs): Job 600 Job 700 Direct material $750 $850 Direct labour (50 hours per job) $600 $600 Units completed 100 50 Number of setups l 1 Number of orders 4 2 Machine hours 20 30 Parts used 20 40 The company's normal activity is 4000 direct labour hours (DLH). Calculate the cost per unit for these two jobs under a traditional system and under ABC. w :I..|'.|_'-.H