1. How much is the manufacturing cost under the ABC method?
2. How much is the manufacturing cost under the traditional method?
   

FFF Company had the following activity cost pools and cost drivers: Activity Budgeted OH Cost Driver Budgeted Level Pool Rate Machine set ups 200,000 Number of set ups 100 P2,000/set up Materials handling 150,000 Weight of raw materials 50.000 P3/1b. Hazardous waste control 60,000 Weight of hazardous chemical used 10.000 P6/1b. Quality control 75,000 Number of inspections 1.000 P75/inspection Other overhead costs 100.000 Machine hours 20.000 P5/hours An order for 2,500 boxes of Product A has the following production requirements: Machine set ups Raw materials 10,000 Hazardous chemicals 2,000 Inspections 20 Machine hours 500 Direct manufacturing cost actually incurred to produce 2,500 boxes are: Direct Materials - P425,000 and Direct Labor - P400,000. The company used traditional approach of allocating overhead (based on machine hours) before adopting the ABC approach