Kendle and Watson, a CPA firm, has provided audit and tax services to businesses in the London area for over 50 years. Recently, the firm decided to use ABM and activity-based costing to assign its overhead costs to those service functions. Bellamy Kendle is interested in seeing how the change from the traditional to the activity-based costing approach affects the average cost per audit job. The following information has been provided to assist in the comparison:

1. Total direct labor costs £400,000

2. Other direct costs 120,000

3. Total direct costs