Wheat Manufacturing has four categories of overhead. The four categories and the expected overhead costs for each category for next year are as follows: Wheat Manufacturing has four categories of overhead. The four categories and the expected overhead costs for each category for next year are as follows:

Maintenance 120,000 Materials handling 18,000 Setups 16,000 Inspection 60,000 The company has been asked to determine the full cost for a proposed job. Estimates for the proposed job are as follows: Direct materials 2,000 Direct labor (600 hours) 6,000

As the information provided above, now, the business manager is considering using activity-based costing, and the expected activity for the four activity-based cost drivers that would be used by whole business are as follows: Machine hours 5,000 Material moves 600 Setups 200 Quality inspections 1,000

And the estimates for the proposed job are as follows: Direct materials 2,000 Direct labor (600 hours) 6,000 Number of machine hours 80 Number of materials moves 4 Number of setups 8 Number of inspections 6

Required: a. Currently, 20,000 direct labor hours are budgeted for whole business next year. Please calculate the full cost for the job if Wheat Manufacturing uses the direct labor hours as the basis to absorb overheads. ( b. Calculate the full cost for the job if Wheat Manufacturing uses activity-based method to allocate overheads. c. How does activity-based costing (ABC) differ from the traditional approach? Please comment on the underlying difference between their philosophies and the key concern to choose appropriate approach in practice.