Required:

Determine the activity overhead rates (ABC rates). (10 marks)

Determine the unit cost for each job using ABC. Round answers to two decimal places. (5 marks)

ABC Tools has identified the following overhead costs and cost drivers for next year: Expected Actual Transactions 400 4,000 25,000 75,000 Overhead Item Expected Cost Cost-Driver Setup costs.... $ 90,000 ....50,000 150,000 .. 30,000 Number of setups Number of orders... . Machine hours Kilowatt hours Ordering costs Maintenance costs The following are two of the jobs completed during the year; Job 700 $1,200 $900 250 40 2 10 50 60 Job 701 Direct materials Direct labor Units completed... $600 $400 100 20 Direct labor hours . . .. Number of setups Machine hours. Kilowatt hours.... 4 40 25 The company's practical activity is 5,000 direct labor hours