Lotus Ltd has identified the following overhead costs and cost drivers for next year Overhead Items Budgeted cost Setups cost 55,000 Ordering Cost 64,000 Maintenance cost 61,000 Power 12,000 Cost Driver Estimated activity Number of setups 1800 Number of orders 3,500 Machine Hours 1800 KILOWATTS 6000 The following is one of the jobs completed during the year Job A Direct materials $8000 Hourly rate 14 Units completed 250 DLH 440 Activities Number of setups 10 Number of orders 20 Machine hours 650 Kilowatts 1000 Actual overhead $5,500 The company uses Direct Labour Hours as the unit level cost driver. The estimated direct labour hours are 13,500 hours. REQUIRED Part 1 1. Calculate the predetermined rate for the plant using FBC based on direct labour hours for the job 2. Calculate total product cost using FBC based on Machine hours for each job 3. Calculate the unit cost for each Product 4. If the company has a mark up of 15%, what will be the selling price? 5. Is the overhead over-applied or under-applied? How will you adjust Cost of goods sold Part 2 6. Calculate the predetermined rate for the plant using ABC based on machine hours for each job 7. Calculate product cost under ABC. 8. Calculate the unit cost for each Product [ABC] 9. Is the overhead over-applied or under-applied under ABC? 10. Why is activity based costing considered more reliable than functional based costing?