Isadores Implements, Inc., manufactures pens and mechanical pencils often used for gifts. Overhead costs are currently allocated using direct labor-hours, but the controller has recommended an activity-based costing system using the following data. Cost Driver Volume Activity Cost Driver Cost Pencils Pens Setting up Number of setups $ 72,000 20 30 Inspecting Number of parts 21,600 4 6 Packing and shipping Number of boxes shipped 43,200 45,000 75,000 Total overhead $ 136,800 Required: a. Compute the amount of overhead to be allocated to each product under activity-based costing. b. Compute the amount of overhead to be allocated to each product using labor-hours as the allocation base. Assume that the number of labor-hours required to assemble each box is 0.1 for pencils and 0.2 for pens and that 45,000 boxes of pencils and 75,000 boxes of pens were produced during the period.

Compute the amount of overhead to be allocated to each product under activity-based costing. (Do not round intermediate calculations.)

	Overhead
Pencils
Pens

Compute the amount of overhead to be allocated to each product using labor-hours as the allocation base. Assume that the number of labor-hours required to assemble each box is 0.1 for pencils and 0.2 for pens and that 45,000 boxes of pencils and 75,000 boxes of pens were produced during the period. (Do not round intermediate calculations and round your final answers to the nearest whole dollar.)

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	Overhead
Pencils
Pens