Integrated Chip Corporation has a significant level of manufacturing overhead. After preparing their budget for the next year, management expects the following overhead costs (the cost driver for each overhead cost pool is also shown): Activity Total Cost Cost Driver Maintenance $40,000 Machine hours Materials receiving 160,000 Shipments received Machine setups 100,000 # of setups Inspection 60,000 #of inspections The expected activity for the year for various cost drivers is: Direct Labor Hours 40,000 Machine Hours 20,000 Shipments Received 4,000 Setups Quality Inspections 8,000 200 The company is considering accepting a significant production contract which will result in revenue of $600,000. Cost estimates for the contract are as follows: Direct materials $200,000 Direct labor (15,000 hours) S300,000 Number of material shipments received 580 Number of inspections Number of setups 70 Number of machine hours 6,000 100 NOTE: Round all per-unit costs to nearest cent. a) What amount of overhead would be allocated to the contract if a company-wide rate based on direct labor hours were used? (2 point) b) How much overhead should be allocated to the contract based on Activity-Based Costing? (2 points) c) What is the total cost of the proposed contract under Activity-Based Costing? (1 point) d) Is the company more likely to accept the contract under Activity-Based Costing or using a company-wide rate? (1 point)