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	$	96,900		21	30
Inspecting	Number of parts		33,000		4	7
Packing and shipping	Number of boxes shipped		66,000		40,000	70,000
Total overhead		$	195,900

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 0.2 for pencils and 0.1 for pens and that 40,000 boxes of pencils and 70,000 boxes of pens were produced during the period.