Finland furniture manufacturing makes two models of office chairs: regular and deluxe. summary data for the two products showed the following:

unit costs regular deluxe

Direct materials $65 $105

direct labour($20 per hour) 10 20

manufacturing overhead 4.80 9.60

Under the company's current costing, manufacturing overhead is allocated on the basis of direct labour hours. The overhead of the year follows:

materials handling $300000

setups 400000

general factory overhead 500000

total $1200000

The following table presents the activity levels that relate to the overhead costs:

cost driver regular deluxe total

#of parts 600000 900000 1500000

# of setups 75 50 125

direct labour hours 45000 80000 125000

the market price for the regular chairs is $104 with expected sales of 40000 units. The company expects to sell 25000 deluxe chairs at a selling price of $170 per unit.

Required

Determine the unit gross profit for the deluxe chair using both traditional and activity based costing methods

(20 marks)