Burrows Corporation manufactures several different types of printed circuit boards; however, two of the boards account for the majority of the company's sales. The first board, a television circuit board, has been a standard in the industry for several years. The market for this type of board is competitive and, therefore, price sensitive. Burrows plans to sell 65,000 of the TV boards in 2016 at a price of $150 per unit. The second high-volume product, a personal com- puter (PC) circuit board, is a recent addition to Burrows's product line. Because the PC board incorporates the latest technology, it can be sold at a premium price; the 2016 plans include the sale of 40,000 PC boards at $300 per unit.
Burrows's management group is meeting to discuss strategies for 2016 and the current topic of conversation is how to spend the sales and promotion dollars for next year. The sales man- ager believes the market share for the TV board could be expanded by concentrating Burrows's promotional efforts in this area. In response to this suggestion, the production manager said, "Why don't you go after a bigger market for the PC board? The cost sheets I get show the contribution from the PC board is more than double the contribution from the TV board. I know we get a premium price for the PC board, so selling it should help overall profitability."
Burrows uses a standard cost system and the following data apply to the TV and PC boards.

Variable factory overhead is applied on the basis of direct labour hours. For 2016, variable fac- tory overhead is budgeted at $1,120,000 and direct labour hours are estimated at 280,000. The hourly rates for machine time and direct labour are $18 and $22, respectively. Burrows applies a materials handling charge at 10 percent of material cost. This materials handling charge is not included in variable factory overhead. Total 2016 expenditures for material are budgeted at $10,600,000.
Ed Welch, Burrows's controller, believes that before management proceeds with the discussion about allocating sales and promotional dollars to individual products, it might be worthwhile to look at the products on the basis of the activities involved in their production. As Welch explained to the group, "Activity-based costing integrates the cost of all activities, known as cost drivers, into individual product costs rather than including these costs in overhead pools." Welch has prepared the following schedule to help management understand this concept.

"Using this information," Welch explained, "we can calculate an activity-based cost for each TV and PC board and then compare it to the standard cost we have been using. The only cost that remains the same for both cost methods is the cost of direct material. The cost drivers will replace the direct labour, machine time, and overhead costs in the standard cost."
Required:
Prepare an activity-based costing report for the TV and PC boards, and comment on the differences with the current standard costs.

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TV Board PC Board Direct material Direct labour Machine time $80 $140 4 hours 1.5 hours 1.5 hours Annual Activity for Budgeted Cost Cost Driver Cost Driver Material overhead: $ 400,000 220,000 Number of parts Number of boards 4,000,000 parts 110,000 boards 110,000 boards Procurement Production scheduling Packaging and shipping 440,000 S1,060,000 Number of boards Variable overhead: Machine setup Hazardous waste disposal Quality control General supplies $ 46,000 48,000 560,000 66,000 S1,120,000 Number of setups Kilograms of waste Number of inspections 278,750 setups 16,000 kilograms 160,000 inspections 110,000 boards Number of boards Manufacturing: Machine insertion S1,200,000 4,000,000 Number of parts Number of parts 3,000,000 parts 1,000,000 parts 110,000 boards Manual insertion Wave soldering 132,000 S5,332,000 Number of boards