Jackets Galore, Inc. presently uses the traditional costing method for allocating overhead for their 6 lines of seasonal jackets. The company is considering moving to an activity based costing approach and provides the following information:

Activity Cost Pools	Estimated ANNUAL overhead	Product A	Product B
Designing	$450,000	7,000	5,000
Sizing and cutting	$4,000,000	90,000	70,000
Stitching and trimming	$1,440,000	30,000	50,000
Wrapping and packing	$336,000	16,000	16,000

a) If the company allocated its overhead based on machine hours, what is the estimated overhead per machine hour? Use sizing and cutting data for machine hours.

b) If the company moves to an ABC approach, what would the overhead allocation be per activity cost pool?

Designing: $ per designer hour

Sizing and cutting: $ per machine hour

Stitching and trimming: $ per labour hour

Wrapping and packing: $ per finished unit

c) What would the total overhead allocated under each method be based on actual activity in June? NOTE -- The data below is only for June - the estimated overhead numbers provided are annual.

Activity Cost Pools	Actual use of cost drivers per activity
Designing	900 designer hours
Sizing and cutting	10,000 machine hours
Stitching and trimming	7000 labour hours
Wrapping and packing	2500 finished units

Traditional $

Designing: $

Sizing and cutting: $

Stitching and trimming $

Wrapping and packing: $