Salter Equipment Company began the following jobs during March 2004:

Required:

a. Calculate the cost of each job using direct labor hours as the allocation base for all overhead.

b. Calculate the cost of each job using activity-based costing. Use direct labor hours as the allocation base for "other overhead cost."

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Direct material Direct labor Direct labor hours Job 303 $2,000 Job 304 $2,000 $3,120 $6,240 260 520 5 30 20 0 2 1 22 9 Machine hours machine A Machine hours machine B Machine setups Engineering changes Estimated overhead cost for 2004: Depreciation machine A Depreciation machine B Machine setup cost Engineering cost Other overhead cost Total Estimated activities for 2004: Machine hours machine A Machine hours machine B Number of setups Number of engineering changes Number of direct labor hours $ 100,000 500,000 50,000 200,000 150,000 $1,000,000 1,000 1,000 80 800 20,000