Rona Inc. has been asked to submit a bid on two prospective jobs, one for Jay Inc. and the other for Ras Inc. The Corporation uses a job costing system and applies overheads using machine hours. Total overhead for the year is expected to be $1,000 000, and it is expected that 25 000 machine hours will be worked.

Addition information relating to the prospective jobs is as follows:

Jay Inc. Ras Inc. Direct materials $30 000 $35 500 Direct labour $45 000 $25 500 Number of inspections 8 5 Number of set-ups 4 3 Number of machine hours 4 000 7 000 Number of engineering hours 200 80 Number of units produced 2 000 2 500

a. Calculate the overhead absorption rate based on the traditional method using machine hours as the activity base. . (1 mark) b. Using the traditional job costing system, calculate the total cost of each job. (8marks) c. What is the total cost per unit produced for each job? (2 mark)