Carson Weeks has been studying his department?s profitability reports for the past six months. He has just completed a managerial accounting course and is beginning to question the company?s approach to allocating overhead to products based on machine hours. The current department overhead budget of $760,500 is based on 34,000 machine hours. In an initial analysis of overhead costs, Carson has identified the following activity cost pools.

Cost Pool	Expected Cost	Expected Activities
Product assembly	$	272,000	34,000	Machine hours
Machine setup and calibration	225,000	1,500	setups
Product inspection	126,000	1,800	batches
Raw materials storage	137,500	550,000	pounds
$	760,500