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QUESTION 7 Elite Ltd produces custom machine parts on a job order basis. The company has two direct product cost categories: direct materials and direct

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QUESTION 7 Elite Ltd produces custom machine parts on a job order basis. The company has two direct product cost categories: direct materials and direct labour; in the past indirect manufacturing were allocated to products using a single indirect cost pool, allocated based on direct labour hours. The indirect cost rate was $115 per direct labour hour. The company recently adopted an Activity-Based Costing (ABC) system. The manufacturing process has been organised into four activities. The following list Indicates the activities, cost drivers. and cost allocation rates. Activity Cost Driver Cost per unit of cost driver Materials Handling Number of parts $1.20 per part Milling and Assembly Machine hours $20.00 per hour inspection Number of units produced $25.00 per unit Shipping Number of orders shipped $1500.00 per order The company's information system automatically collects the necessary data for their above mentioned activities. The data for two recently completed jobs are shown below." Question Completion Status: The company's information system automatically collects the necessary data for their above mentioned activities. The data for two recently completed jobs are shown below. Job order 410 Job order 411 Direct material cost $9,700 $59,900 Direct labour cost $750 $11,250 Number of direct labour hours 25 375 Number of parts 500 2.000 Number of machine hours 150 1050 Number of orders shipped Number of units produced 10 200 Required: a. Compute the manufacturing cost per unit for job orders 410 and 411 under the old, traditional costing system. b. Under the new ABC system, calculate the manufacturing cost per unit for job orders 410 and 411. (10

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