Alexander Custom Furniture has five indirect-cost pools (purchasing, material handling, machine maintenance, product inspection and packaging). The company is in the process of bidding on two jobs:

1) Job 0802: an order of 15 intricate personalised furniture.

2) Job 2408: an order of 6 standard personalised furniture.

The controller wants you to compare overhead allocated under the simple job-costing system and newly designed activity-based job-costing system. Total budgeted costs in each indirect-cost pool and the budgeted quantity of activity driver are as follows:

	Budgeted Overhead	Activity Driver	Budgeted Quantity of Activity Driver
Purchasing	$70,000	Purchase orders processed	4,000
Material handling	$87,500	Material moves	10,000
Machine maintenance	$237,300	Machine-hours	21,000
Product inspection	$18,900	Inspections	3,780
Packaging	$39,900	Units produced	7,980
	$453,600

Information related to Job 0802 and Job 2408 follows. Job 0802 incurs more batch-level costs because it uses more types of materials that need to be purchased, moved and inspected relative to Job 2408.

	Job 0802	Job 2408
Number of purchase orders	25	8
Number of material moves	10	4
Machine-hours	40	60
Number of inspections	9	3
Units produced	15	6

REQUIRED:

A) Determine the overhead rate and the total amount of overhead costs allocated to Job 0802 under a simple costing system, where overhead is allocated based on machine-hours. (4 marks)

B) Determine the overhead rate and the total amount of overhead costs allocated to Job 2408 under an activity-based costing system using the appropriate activity drivers. (11 marks)