Lillis Manufacturing makes a variety of industrial fittings. The products are similar, but not identical, and all go through the same processes. Some orders from Lillis go to companies in regions with strict environmental regulations. Lillis is required to conduct compliance tests on those orders before shipment. The company produces to order and uses a job costing system. Overhead is applied to jobs based on direct labor cost. The cost analyst at Lillis recently put together an estimate of overhead for the coming year, which is shown in the following table.

Category Amount

Machining $ 1,168,000

Assembly 968,000

Setup labor 1,088,000

Packaging 948,000

Compliance testing 868,000

Total $ 5,040,000

Three jobs were started and completed in November. Details on the jobs follow.

Job 1101 Job 1102 Job1103

Direct materials $ 7,200 $ 7,920 $ 7,000

Direct labor $ 18,000 $ 21,120 $ 18,200

Number of units 360 660 560

Direct labor hours 240 800 360

Machine hours 660 860 760

Production runs 1 2 1

Compliance testing required? Yes No Yes

Lillis is considering adopting an activity-based costing system. The cost analyst has studied the system and has recommended the following cost drivers for each of the overhead categories. She has also estimated the annual volume for each of the cost drivers. This information follows.

Overhead Category Cost Driver Annual Cost Driver Volume

Machining Machine hours 58,400 machine-hours

Assembly Direct-labor hours 16,000 direct-labor hours

Setup labor Production runs 80 production runs

Packaging. Units 632,000 units

Compliance testing Orders tested 20 orders tested T

he average direct labor rate at Lillis is $105 per hour.

Required:

a. What is the unit cost for each of the three jobs started and completed assuming Lillis uses their current costing system? (Round your answers to 2 decimal places.)

b. What is the unit cost for each of the three jobs started and completed assuming Lillis adopts the ABC system as designed by the cost analyst? (Do not round intermediate calculations. Round your final answers to 2 decimal places.)