Activity-based costing versus traditional costing. Tree Corporation manufactures plywood and trim. Overhead costs are currently allocated using direct labor-hours, but the controller has recommended using an activity-based costing system using the following data:

Activity	Cost Driver	Cost	Plywood	Trim
Production Setup	Number of Setups	$ 60,000	15	10
Material Handling	Number of Parts	$ 25,000	25	15
Packaging/Shipping	Number of Units Shipped	$ 30,000	40,000	60,000
	Total	$ 115,000

a. Compute the amount of overhead allocated to each of the products (Plywood and Trim) under activity-based costing.

b. Compute the amount of overhead to be allocated to each product using labor-hours as the allocation base. Assume labor-hours required to assemble each unit is .5 for Plywood and 1.0 for Trim, and 60,000 units of Plywood and 90,000 units of Trim, were produced.