Managerial accounting question on overhead cost per unit under traditional versus ABC costing system - see attached document.

The Clinic provides two services: A and B. The annual patient visits are 800 for Service A and 700 for Service B. The clinic has traditionally used direct labor-hours as the basis for applying all overhead to the services. Service A requires 0.2 direct labor hours per visit and Service B requires 0.6 direct labor hours per visit. The total estimated overhead for next period is $71,286. The clinic is considering switching to an activity-based costing system for the purpose of computing unit product costs for internal decision making. The new activity-based costing system would have three overhead activity cost pools Activity 1, Activity 2, and General Factory--with estimated overhead costs and expected activity as follows: Expected Activity Estimated Activity Cost Pool Overhead Costs Activity 1............... $20,272 Activity 2............... 29,380 General Factory...... 21,634 Total....................... $71,286 Service A 300 800 160 Service B 500 500 420 Total 800 1,300 580 (Note: The General Factory activity cost pool's costs are allocated on the basis of direct labor hours.) Required: 1) Determine the overhead cost per unit of Service B under the traditional costing system. 2) Determine the overhead cost per unit of Service B under the activity-based costing system. 3) Write a very short explanation as to why there is a difference. 1