Carson Weeks has been studying his departments profitability reports for the past six months. He has just completed a managerial accounting course and is beginning to question the companys approach to allocating overhead to products based on machine hours. The current department overhead budget of $930,230 is based on 44,500 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 $ 400,500 44,500 Machine hours Machine setup and calibration 328,950 2,550 setups Product inspection 125,580 1,380 batches Raw materials storage 75,200 470,000 pounds $ 930,230 Carson Weeks is taking the next step in his exploration of activity-based costing and wants to examine the overhead costs that would be allocated to two of the departments four products. He has gathered the following budget information about each product. Driver Usage Component 3F5 Component T76 Machine hours 1,200 10,000 Setups 42 23 Batches 20 10 Pounds of raw materials 10,000 10,000

(a)

Calculate the total overhead allocated to each component under the traditional method using machine hours as the overhead application base. (Round overhead rates to 2 decimal places, e.g. 5.27 and round final answers to 0 decimal places, e.g. 5,275.)

Component 3F5 Component T76

Total Overhead allocated

(b)

Calculate the total overhead allocated to each component under activity-based costing. (Round overhead rates to 2 decimal places, e.g. 5.27 and round final answers to 0 decimal places, e.g. 5,275.)

Component 3F5 Component T76

Total Overhead allocated