Setup costsNumber of setups73,200
Special parts handlingNumber of special parts60,000
Other materials handlingNumber of batches63,000
Order handlingNumber of orders19,8000
Other overheads-216,000
Other overhead costs do not have an identifiable cost driver, and in an ABC system, these overheads would be recovered on a direct labour hours basis.
(a) Calculate the production cost per unit of Plus and of Doubleplus if the company uses traditional absorption costing and the overheads are recovered on a direct labour hours basis.
(b) Calculate the production costs per unit of Plus and of Doubleplus if the company uses ABC.
