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:

Activity	Cost Driver	Cost			Pencils	Pens
Setting up	Number of setups	$	95,000		23	27
Inspecting	Number of parts		24,800		3	5
Packing and shipping	Number of boxes shipped		55,000		35,000	75,000
Total overhead		$	174,800
a. Compute the amount of overhead to be allocated to each product under activity-based costing. Pencils Pens 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 35,000 boxes of pencils and 75,000 boxes of pens were produced during the period. (Do not round intermediate calculations.) Pencils Pens