PROBLEM

The annual MOH budget is equal to $1,000,000 based on an annual level of activity of 5,000 DLH.

There are two job orders: job order 701 (500 units), and job order 702 (2,000 units).

One unit of the product requires 2 DLH.

Activity pool	OH budget	Planned level of activity
Machine setup	$260,000	1,000 setups
Quality inspection	$250,000	2,500 inspection hours
Purchase order	$150,000	800 orders
Part handling	$90,000	30,000 parts
MH	$250,000	50,000 hours

Activity pool	Job order 701	Job order 702
Machine setup	500 setups	500 setups
Quality inspection	1500 inspection hours	1000 inspection hours
Purchase order	300 orders	500 orders
Part handling	25,000 parts	5,000 parts
MH	20,000 hours	30,000 hours

Required: Calculate the per unit cost for both orders (701 and 702) using the traditional method and the ABC analysis.