Outdoor Sports, Inc., produces two types of skis, downhill skis and cross country skis. Product and production information about the two items is shown below: Downhill skis Cross country skis

Number of sets sold 75,000 down hill 125,000 cross country Number of setups 200 down hill 50 cross country Total direct labor hours 150,000 hours down hill 250,000 hours cross country Direct labor hours per unit 2 hours down hill 2 hours cross country Total machine hours 25,000 hours down hill 100,000 hours cross country Machine hours per unit 0.333 hours down hill 0.08 hours cross country Indirect costs consist of the following: Depreciation of factory equipment $2,000,000 Setup costs 1,500,000 Miscellaneous indirect costs 1,000,000 Total $4,500,000 a. If Outdoor Sports uses the traditional two-stage method of allocating overhead costs based on direct labor hours, what is the amount of indirect costs per set of skis for each of the two types of skis? b. If Outdoor Sports uses activity based costing, what is the total amount of indirect costs per set of skis for each of the two types of skis? Assume that depreciation is allocated based on machine hours, setup cost based on number of setups and misc cost based on the number of direct labor hours