Jo Jo Ltdproduces customised tables that move through several different processes.

The prices of direct costs are as follows:

• Wood costs $80 per metre
• Steel costs $120 per beam
• Direct labour costs $20 per hour

ForJob #806Jo Jo identified the following costs:

• Direct materials - wood - 30 metres
• Direct material - steel - 20 beams
• Direct labour - 100 hours

The followingoverhead costs and cost drivers are identified for the current period:

ActivityCost driverCostActivity levelMachine set upNumber of setups100,00040Steel refiningNumber of pads used320,000800CleaningNumber of rooms cleaned200,0001,000InspectionNumber of inspections260,00013,000Mouse trappingNumber of cats used20,00010

Required:

(a) Determine how much cost should be assigned to job #806 (10 marks)

(c) Identify activities that do not add value to the final product (5 marks)

(b) What could Jo Jo Ltd do to minimise its machine set up costs? (5 marks)