allocates manufacturing overhead to each model based on machine-hours. A large portion of the Dixon Robotics manufactures three robot models: the A3B4, the BCII, and the C3PO. Dixon the department anticipates that it will incur $100,000 in total costs. The following estimates pertain company's manufacturing overhead costs is incurred by the Maintenance Department. This year, Calculate the amount of Maintenance Department costs that would be allocated to each robot b. Calculate the amount of Maintenance Department costs that would be allocated to each robot to the upcoming year. Model A3B4 Are cost allocations distorted using machine-hours as a single activity base? Explain your Estimated Estimated Units Machine-Hours of Production 20,000 6,250 BC11 15,000 5,000 C3PO 5,000 2,500 Ed Smith, Dixon's cost accountant, suspects that unit costs are being distorted by using a single activity base to allocate Maintenance Department costs to products. Thus, he is considering the Under the proposed ABC method, the costs of the Maintenance Department would be allocated to the following activity cost pools using the number of work orders as an activity base: (1) the repairs pool and (2) the janitorial pool. Of the 2,000 work orders filed with the Maintenance Depart- ment each year, approximately 400 relate to repair activities, and 1,600 relate to janitorial activities. Machinery repairs correlate with the number of production runs of each robot model. Thus, the repairs pool would be allocated to robots based on each model's corresponding number of production runs. Janitorial services correlate with square feet of production space. Thus, the janitorial pool would be allocated to products based on the square feet of production space devoted to each robot model. The following table provides a summary of annual production run activity and square footage requirements. Estimated Square Feet of Production Space Used 5,000 10,000 25,000 Instructions model (on a per-unit basis) using machine-hours as a single activity base. model (on a per-unit basis) using the proposed ABC method. Estimated Number of Production Runs Model A3B4 BC11 50 150 200 c