Marvel Bank & Trust operates in a very competitive marketplace, using a traditional labor-hour-based system to determine the cost of processing its mortgage loans. Recently, the firm explored a switch to activity-based costing to determine the wisdom of its previous ways. The following information is available:

Activity	Cost			Drive	Driver Units
Application processing		725,400		Applications		3,100
Loan underwriting		840,500		Underwriting hours		20,500
Loan closure		818,800		Legal hours		8,900
Total		2,384,700

Two loan applications, among many others, were originated and closed during the year. No. 7439 consumed 8.0 hours in loan underwriting and 6.0 hours in loan closure, for a total of 14 hours. No. 7809 also required 14 hours of time, subdivided as follows: 6.5 hours in loan underwriting and 7.5 hours in loan closure.

Required:

1. Use an activity-based-costing system and determine the cost of processing, underwriting, and closing the two loan applications.
2. Determine the cost of processing the two loans if Marvel uses the traditional labor-hour-based system. Conversations with management found that, on average, each application took eighteen labor hours of processing time, excluding underwriting and closure. (Round your intermediate calculations to the nearest whole number.)

per application per underwriting hour per legal hour A Application processing Loan underwriting Loan closure Application no. 7439 Application no. 7809 B. Application no. 7439 Application no. 7809