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