Milano Company is a manufacturing firm that currently uses traditional costing with machine hours as the allocation base. The company is determining if they should implement activity-based costing and has identified the potential activity areas along with the expected activity for its' two high-end product lines: Boots and Purses.

			Expected Activity
Activity	Overhead Cost	Allocation Base	Boots	Purses
Design	$3,000,000	Design Hours	100,000	50,000
Production	$1,000,000	Machine Hours	20,000	30,000
Finishing	$400,000	Labour Hours	5,000	3,000

During the year, actual activity was recorded as follows:

Activity	Boots	Purses
Design Hours	93,000	55,000
Machine Hours	19,800	32,000
Labour Hours	5,500	3,200

Compute the amount of overhead allocated to each product line under activity-based costing. Show your calculations.