Mt. Hood Manufacturing uses ABC to allocate manufacturing overhead costs, and has computed the following: 

The company produces two models of industrial heaters, Crest and Cascade. 

The quantity of each activity required by Crest and Cascade is listed below.

Requirement 

Allocate the $1,040,000 estimated manufacturing overhead between the products using activity-based costing to obtain the total manufacturing overhead cost per product. Reconcile the manufacturing overhead allocated to the two products with total manufacturing overhead.  

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Activity Equipment Setup Ordering Machine Maintenance Receiving Allocation Base Number of Setups Number of Orders Machine Hours Receiving Hours Allocation Rate $400 per setup $10 per order $10 per hour $ 20 per hour