Go Fast Cycles produces three models of bicycles. Model A is a basic bicycle and Go Fasts most well-established product with production of 100,000 units in the most recent period. Models B and C have been introduced more recently as more specialised models to targeting wider customer groups. In the most recent period Go Fasts production of models B and C was 16,000 units and 12,000 units respectively. The way in which the three different products used the varying resources of the firm in the most recent period follow:

	Model A	Model B	Model C	Total
DL hours per unit	6.5	3	2.5
Machine hours per unit	1	2	6
Number of set-ups in the period	124	200	342	666
Number of orders of parts	200	480	428	1,108

Overhead costs relating to Go Fasts production have been analysed into three cost pools and three related cost drivers. Total overhead costs of $1,004,230 can be broadly classified as follows, with the chosen cost drivers being those activities with the closest cause-effect relationship to the cost pools

OH Cost Pool	Cost Driver		Budgeted OH Costs
Machine operating	Machine hours		$583,500
Product Scheduling	No. of set-ups		$256,630
Purchasing costs	No. of orders		$164,100
		Total	$1,004,230

Required

1. Calculate the amount of OH cost per unit of each of the three product lines based on: a) a single plant-wide rate based on direct labour hours, and b) ABC rates using the three cost drivers identified above.

2. Compare the overhead allocated per unit for each of the three models sold by Go Fast under the two methods calculated above. Based on your calculations, should Go Fast introduce ABC? Discuss Why?