The following example illustrates how traditional cost accounting techniques could result in a misleading and inequitable division of costs between low-volume and high-volume products, and...

Extracted text: The following example illustrates how traditional cost accounting techniques could result in a misleading and inequitable division of costs between low-volume and high-volume products, and demonstrates that ABC may provide a more meaningful allocation of costs. Suppose that Cooplan manufactures four products, W, X, Y and Z. The direct labour cost per hour is $5. Other output and cost data for the period just ended are as follows. Number of production runs in the period Material cost Direct labour Machine per unit $4 Output units hours per unit hours per unit W 10 2 20 1 1 10 2 80 3 Y 100 5 20 1 1 100 5 80 3 14 Overhead costs 24 Expediting and scheduling costs Materials handling costs 9,100 7,700 Short-run variable costs 3,080 10,920 Set-up costs Required Prepare unit costs for each product using traditional costing and ABC.