Penty's Fine Furniture manufactures two models of chairs, a standard and a deluxe model. The following activity and cost information has been compiled:

	Standard	Deluxe
# DL Hours	924	930
# Set Ups	28	62
# Components	5	8

Total estimated manufacturing overhead for the period is $860,000. Penty's currently uses a volume-based costing system with direct labor hours as the only cost driver.

a. Calculate the amount of manufacturing overhead allocated to each product under a traditional volume-based system.

Standard =

Deluxe =

b. You have recently heard of activity-based costing, which attempts to allocate costs using cost drivers associated with different activities. You are able to determine of the total overhead, $95,000 is associated with costs to set up the equipment for each batch and the remaining $765,000 overhead is associated with activities related to the complexity of assembly. Calculate the amount of manufacturing overhead allocated to each product using an activity-based costing system, with the two activities mentioned.

Standard =

Deluxe =