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Financial information relating to the most recent trading period and two orders recently received are provided below:
Overhead costs:
Ordering Costs 7,200
Design expenses 28,500
Artwork 17,250
Despatch costs 10,800
Activity drivers:
Total orders received 48,000
Total design consultation emails 356,250
Total artwork setups 115,000
Total packets despatched 90,000
Total machine hours 21,250
Details of two orders received
Order reference Notebook KJ34 Diary XT501
Direct materials paper, binding, etc. 1.86 1.24
Direct labour 0.52 0.68
Machine hours required 0.20 0.30
Number of design consultations 3 5
Number of artwork setups required 4 8
Calculate the cost of each of the orders received using:
(i)The existing overhead allocation method.
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