Activity Based Costing

Plant 2 produces about one hundred products. Its largest selling product is product X and the least product is product Y. Relevant data is given thus:
Product X Product Y Total product
Unit produced per annum 20,000 4,000 200,000
Material cost per unit $3.00 $3.00
Direct labour per unit 10 mins 10 mins

Machine Time per unit 2 hours 2 hours
Number of set-ups, P.A 36 4 200
Number of purchase orders 40 8 3,600
Number of time material handled 300 20 15,000
Direct labour cost/hour $7.50

Overhead costs: $
Set up 300,000
Purchasing 200,000
Material handling 155,000
Machines 720,000
Total $1,375,000. Total machine hours are 750,000
You are required to calculate the unit cost using
(a) Traditional method
(b) ABC method