# of purchase orders $400,000 overhead cost

# of shipments $100,000

# of setups $300,000

Direct labor hrs$125,000

# of inspections $75,000

During the year, 1000 purchase orders, 300 shipments, 600 setups, 750 inspections & 10,000 direct labor hours occurred to assemble monitors.

Assume a batch of 200 monitors has the following cost activity:

Purchase order 7

Material shipments 12

Machine setups 2

Direct labor hours50

Inspections 3

1.Determine the overhead allocation for the batch of 200 monitors under the traditional overhead allocation based on direct hours?

2. Overhead allocated for receiving is $3,999.96. Determine overhead allocation for the batch under activity-based costing?