XYZ Company has identified the following overhead activities, costs, and activity drivers for the coming year:

Activity                                      Expected Cost                      Activity Driver                 Activity Capacity

Material-handling costs              $45,000                                Number of moves              450

Machine costs                           80,000                                Machine hours                  20,000

Order costs                              15,000                                 Number of orders                750

Receiving costs                         30,000                                 Number of parts               50,000

Setup costs                             50,000                                  Number of setups             250

Assume that each activity corresponds to a process. XYZ’s normal activity is 5,000 direct labor hours. The following two jobs were completed during March:

                                                      Job X-1                           Job Y-4

Direct materials                               $1,500                           $2,000

Direct labor ($15 per hour) $750                             $750

Units completed                               200                               200

Number of moves                               3                                  6

Machine hours                                 125                               75

Number of orders                               3                                 12

Number of parts                               200                              800

Number of setups                             1                                 4

Required:

1. Determine the unit cost for each job using direct labor hours to apply overhead (tradisional method)

2. Determine the unit cost for each job using ABC method

3. Which method is more accurate?give explaination.