Currently the company uses a plant-wide rate for allocating manufacturing ovherhead. The plant manager believes it is time to refine the method for cost allocatin and have the accounting department identify the primary production activities and their cost drivers.

Activities: Cost Driver: Allocation Rate

Material handling: number of parts: $2 per part

Assembly: labor hours: $20 per hour

Inspection: time at inspection station: $3 per minute

The current traditional cost method allocates overhead based on direct manufacturing labor hours using a rate of $200 per labor hour. They recently completed a batch that required 1,000 parts, 10 direct manufacturing labor hours, and 15 minutes of inspection time and consisted of 500 remote controls.

A. What are the indirect manufacturing costs per remote control assuming the traditional method is used?

B. What are the indirect manufacturing costs per remote control assuming an activity-based-costing method is used?