I need help with this question, my answers are in bold.

Assume that a plant has two categories of overhead: material handling and quality inspection. The costs expected for these categories for the coming year are as follows:

Material handling $ 200,000

Quality inspection $ 600,000

The plant currently applies overhead using machine hours and expected actual capacity. This figure is 80,000 machine hours. Linda Bixby, the plant manager, has been asked to submit a bid and has assembled the following data on the proposed job:

Potential Job

Direct materials $ 3,700

Direct labour (1,000 hours) $ 7,000

Overhead $ ?

Number of material moves 10

Number of inspections 5

Machine hours 900

Linda has been told that many competitors use an activity-based approach to assign overhead to jobs. Before submitting her bid, she wants to assess the effects of this alternative approach. She estimates that the expected number of material moves for all jobs during the year is 1,000; she also expects 5,000 quality inspections to be performed.

Required:

Compute the total cost of the potential job using machine hours to assign overhead. Assuming that the bid price is full manufacturing cost plus 25 percent, what would Lindas bid be?

$200,000 /80,000=$2.5 X 900 hours = $2,250

$3700 + $7000 + $2,250 = $12,950 X 25% = $3,238 + $12,950 = $16,188

Compute the total cost of the job using the number of material moves to allocate material handling costs and the number of inspections to allocate the quality inspection costs. Assuming a bid price of full manufacturing cost plus 25 percent, what is Lindas bid using this approach?

$200,000/1000 = 200 X 10 = $2000

$600,000/5000 = 120 X 5 = $600

$3700 + $7000 + $2600 = $13,300 X 25% = $3325 + 13,300 = $16,625