6. ABC Overhead Calculation LO3 Tip Top Company sells umbrellas suited for small and large picnic tables. In accordance with the advice of its accountant, Tip Top is considering whether to adopt an activity-based costing system. To evaluate the possible impact on cost, the company has accu- mulated the following data from last year: Activity Allocation Base Purchasing Number of purchase ordes Receiving Number of shipments received 150,000 Sales Number of sales orders Overhead Cost S300,000 150,000 The numbers of activities relating to small and large umbrellas were as follows: Purchase orders Shipments received Sales orders Small 10,000 12,500 8,500 Large 5,000 7,500 6,500