Eric Parker 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 $793,920 is based on 37,000 machine hours. In an initial analysis of overhead costs, Eric Parker has identified the following activity cost pools. Cost PoolExpected CostExpected ActivitiesProduct assembly $307,100 37,000 Machine hours Machine setup and calibration 259,200 1,800 setups. Product inspection127,680. 1,680 batches. Raw materials storage 99,940. 526,000 pounds $793,920

Eric Parker 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		920			11,400
Setups		40			23
Batches		15			15
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 3F5Component T76Total 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		$		$