Jola Publishing Co publishes two forms of book. The company publishes a children’s book (CB), which is sold in large quantities to government controlled schools. The book is produced in four large production runs. The second book is a comprehensive technical journal (TJ). It is produced in monthly production runs, 12 times a year.
The directors are concerned about the performance of the two books and are wondering what the impact would be of a switch to an activity based costing (ABC) approach to accounting for overheads. They currently use absorption costing, based on number of books produced for all overhead calculations. Overheads amount to $2,880,000.
The CB will be inspected on 180 occasions next year, whereas the TJ will be inspected just 20 times. 
Machine time per unit is 6 minutes for the CB and 10 minutes for the TJ. 
Jola Publishing will produce its annual output of 1,000,000 CBs in four production runs and approximately 10,000 TJs per month in each of 12 production runs. Jola Publishing Co has decided to adopt ABC. Management has put together a list of steps. Please put this list in the order it should be carried out. 1 Calculate the overhead cost per unit of CB and TJ 2 Calculate the absorption rate for each ‘cost driver’ 3 Determine what causes the cost of each activity – the ‘cost driver’ 4 Identify major activities within each department which create cost 5 Create a cost centre/cost pool for each activity – ‘the activity cost pool’
A、4, 5, 3, 2, 1.
B、5, 3, 2, 1, 4.
C、4, 2, 1, 3, 5.
D、4, 1, 2, 3, 5.