Listen Question 4 (20 minutes) Seaside Spa is looking to set its holiday spa package prices and needs to allocate its overhead costs to the packages to help with this pricing. In the past Seaside used a traditional costing system to allocate its overhead, where the number of service hours was considered the single cost allocation base, and the company typically provided 16,000 service hours per year. This year, Seaside is planning to use an Activity- Based Costing system to allocate its overhead. It gathers the following data on its main packages: Massage Whirlpool Mud baths, Facials Estimated Overhead $200,000 800,000 140,000 1.000.000 $2.140.000 Total Expected Usage of Cost Drivers 800 massage hours 10,000 whirlpool hours 2,000 mud baths 8,000 facials The spa's most popular package, Package #1, includes a two hour massage, three hours in the whirlpool, a mud bath, and a facial. Under the traditional costing system used in past, Package #1 would have utilized eight service hours.