5 ABC overhead calculation Lo3 Shoehorn Company sells two types of shoes - budget shoes and premium shoes. Though only recently introducing premium shoes, the company is astounded by the profit margin on that product. On the other hand, the returns on the budget shoes have declined since premium shoes started being made and sold. The expected production and sales are 1000 premium shoes and 20000 budget shoes. Company management is concemed at the traditional overhead cost allocation system being used to cost overhead into the shoes and accumulated the following data from last year in order to conduct an activity- based costing overhead allocation: Activity Allocation base Overhead cost asing Number of purchase orders 200000 $ 100000 $ 200000 The numbers of activities for budget shoes and premium ma tes 100 ext Req Stitching Metres stitched Sales Number of sales orders shoes are as follows: Purchase orders Centimetres stitched Sales orders Required a Calcula Budget 7000 8000 8000 Premium 3000 2000 2000 te the overhead rates for the following activities purchasing, stitching and sales orders. Calculate the dollar amount of overhead that should be ned to a budget shoe and a premium shoe, under the ABC system