Hangers Limited manufactures two different styles of clothes hangers: a basic (B) and a luxury (L) version. The finance department has correctly produced some costing information about the products and the overheads of the business.

The basic hanger weighs 50g, with the luxury version 60% heavier. Each hanger suffers waste in the manufacturing process with 10% of the input wasted for a basic and 20% wasted for a luxury. Both styles of hanger are made from the same material, at a cost of $2 per kg.

Labour to make the hangers varies dependent on type of hanger. The basic hanger takes 2 hours to make a batch of 1000 and the luxury takes 3 hours for the same batch size. Labour costs $8 per hour.

Production levels expected next period are 10,000 batches of the basic hanger and 20,000 batches of the luxury version.

Overheads total $40,000 per period, which are made up of $10,000 for deliveries and $30,000 for set up costs. 25 deliveries in total are expected, 80% of which are for the luxury hanger. The machines will be set up 150 times, including 100 times for the luxury hanger.

a) What is the combined cost of materials for one basic and one luxury hanger combined?

b) What would be the total labour cost of production in the next period? Give your answer to the nearest whole $.

c) If overheads are absorbed on a labour hours basis, how much overhead would be allocated to each luxury hanger?

d) If activity based costing is to be used, the overhead cost allocation to the luxury hanger will be?