A company manufactures Product X and Product Y in the same factory.Overhead costs are currently allocated using direct labor hours, but the accounting manager has recommended an activity-based costing system using the data in the table provided below.Answer the following two questions: a) determine the amount of overhead to be allocated to each type of product under activity-based costing;b) determine the amount of overhead to be allocated to each type of product using labor hours as the allocation base.Assume 60,000 labor hours were used to manufactureProduct X and 20,000 labor hours were used to manufactureProduct Y.

Activity Level

Activity

Cost Driver

Cost

ProductX

Product Y

Production Setup

# of production setups

$ 100,000

12

8

Material Handling

# of parts

$ 20,000

70

30

Shipping

# of units shipped

$ 160,000

120,000

140,000

TOTAL OVERHEAD

$ 280,000