International Steel Company has budgeted manufacturing overhead costs of $1,938,000. It has allocated overhead on a plant-wide basis to its two products (soft steel and hard steel) using machine hours, which are estimated to be 100,000 for the current year. The company has decided to experiment with activity-based costing and has created five activity cost pools and related activity cost drivers as follows:

Activity Center

Material handling: Estimated Overhead (EO)= $288,000 Estimated Activity (EA)= 48,000

Purchase orders: EO=$108,0001 EA=200 orders

Product testing EO= $407,0003 EA= 700tests

Machine set-up EO= $325,000 EA= 5,000

Machining EO= $810,000 EA= 100,000

Each unit of the products requires the following:

SS . HS

Direct materials costs		$300		$200
Direct labour costs		$120		$60
Purchase orders		2		3
Machine set-up		5		10
Product testing		3		4
Machining		50		50
Material handling		4 . 6

a) Under traditional product costing using machine hours, calculate the total manufacturing cost per unit of both products?

b) Under ABC, prepare a schedule showing the calculation of the activity based overhead rates

c) Calculate the total manufacturing rates per unit for both products under ABC