Air Teck Communications manufactures four types of cell phones- basic, mid-level, deluxe and super-deluxe.Overhead costs are currently allocated using direct labor costs, but the Controller has recommended an activity-based costing system using the data at the left.

a. Compute the amount of overhead allocated to the cell phones under activity-based costing.Show your work.

b.Compute the amount of overhead allocated to each of the cell phones using direct labor hours as the allocation base.Show your work.

c.Does it appear that Airteck might benefit from an Activity-Based Costing system?Why or why not?