1.- Vaders Helmet Corporation has four categories of overhead. The expected overhead costs for each category and the expected activity for the four activity-based cost drivers that would be used in total for next year are as follows:

Overhead Category	Total Cost	Cost Drivers	Activity Level
Maintenance	$420,000	Machine-hours	20,000
Materials handling	180,000	Material moves	4,000
Setups	150,000	Setups	200
Inspection	300,000	Quality inspections	8,000
	$1,050,000

Vader has been asked to submit a bid for a proposed job to make special black helmets that detach in parts. The plant manager believes that obtaining this job would result in new business in markets across the galaxy. Bids are usually based upon full manufacturing cost plus 30 percent. Estimates for the proposed job are as follows:

Direct materials	$10,000
Direct labor (750 hours)	$15,000
Number of material moves	8
Number of inspections	5
Number of setups	3
Number of machine-hours	300

Required:

a. Determine the amount of overhead that would be applied to the proposed project if activity-based costing is used, and calculate the total costs of the proposed job. Determine the company's bid if activity-based costing is used and the bid is based upon full manufacturing cost plus 30 percent. (Round amounts to 2 decimal places.)

b. Determine the amount of overhead that would be allocated to the proposed job if 40,000 direct labor-hours are used as the volume-based cost driver for the year (traditional method of allocation). Determine the total costs of the proposed job. Determine the company's bid if the bid is based upon full manufacturing cost plus 30 percent. (Round amounts to 2 decimal places.)

c. Which product costing method produces the more competitive bid?