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Isadore, Inc. manufactures drawing pens and coloring pencils to be used as gifts or souvenirs. Overhead costs are currently allocated using direct labor hours,

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Isadore, Inc. manufactures drawing pens and coloring pencils to be used as gifts or souvenirs. Overhead costs are currently allocated using direct labor hours, but the controller has recommended an activity based costing using the following data: Cost Driver Volume Activity Setting up Inspecting Cost Driver Number of setups Number of parts Cost Pencils Pens $ 75,000 20 30 24,000 5 7 Packing and shipping Number of boxes shipped 43,200 50,000 70,000 Total overhead $142,200

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