Granite, Inc., is using Job Order Costing. Company currently is using a plant-wide overhead rate based on direct labor hours for the assignment of factory overhead costs to jobs. Company is expecting 8,000 direct labor hours for next year.

Due to intense competition accurate cost data has become very important. Accordingly, company is considering use of Activity Based Costing (ABC) for the assignment of factory overhead cost to jobs.

Company has identified the following activities causing the factory overhead costs and corresponding cost drivers for next year:

Activity Activity Cost	Activity Cost	Cost driver	Coat Driver Quantity
Setup costs	100000	Number of setups	400
Materials Ordering cost	40000	Number of orders	2000
Maintenance	200000	# of Machine hours	10000
Power	20000	# of Kilowatt hours	100000
	360000

The following is one of the jobs completed during the year: Job 500

Direct Materila	3500
Direct labor	2400
Unit Completed	100
Direct Labor Hour	100

Number of setups	3
Number of Orders	8
Machine Hours	220
Power Kilowatt hours used	160

a. Compute total cost of Job 500 under current system using a plant-wide overhead rate based on DLH. b. Compute total cost of Job 500 if Granite uses Activity Based Costing.