Question 3 Tomson Ltd has identified the following overhead costs and cost drivers for next year Overhead Items [Budgeted] Power Maintenance cost Ordering cost E ( cost) $ 27,000 17,800 8,150 Cost Driver [Budgeted] E( activity) Number of orders Machine Hours Kilowatt hours 4,000 5,000 52000 The following is one of the jobs completed during the year Product A $2200 Product B $3300 Direct materials $ 2500 210 II 40 Direct Labour Units completed # of orders Machine hours Kilowatt hours Actual overhead $ 3030 400 21 256 400 $1550 350 200 $1800 The company's policy uses machine hours as the activity for FBC method REQUIRED The company's policy uses machine hours as the activity for FBC method REQUIRED Part 1 1. Calculate the predetermined rate for the plant using FBC based on machine hours for each job 2. Calculate total product cost using FBC based on Machine hours for each job 3. Ca the unit cost for each Pr 4. Is the overhead over-applied or under-applied? Part 2 5. Calculate the predetermined rate for the plant using ABC based on machine hours for each job 6. Calculate product cost under ABC. 7. Calculate the unit cost for each Product [ABC] 8. Is the overhead over-applied or under-applied under ABC? 9. Why does FBC differ for ABC methods ? [30 marks]