Q. Calculate the unit cost for each product using Activity-Based Costing to allocate overheads based on the drivers for each overhead cost pool (use the template below) and compare the difference. (5 marks)

Overhead rate

Activity	Calculation	Rate
Handling	$3,000/25	$120
Design changes
No of set-ups

Overhead application allocation

Activity	Leisure Calculation Allocation		Professional Calculation Allocation
Handling	10*120	1,200	15*120	1,800
Design changes
No. of setups
Total
Per unit

Total unit cost

	Leisure	Professional
Direct materials
Direct labour
Overhead
Total cost

Difference between methods

	Leisure (unit cost)	Professional (unit cost)
Traditional based costing
Activity based costing (ABC)
Difference

Bikes R Us manufactures two types of bikes - a Leisure bike and a Professional bike. The following represent information about each bike produced for the month of February 2022 The total overhead costs were: The following information was provided in respect of drivers for each cost pool