Perdon Corporation manufactures safes-large mobile safes, and large walk-in sta- tionary bank safes, As part of its annual budgeting process, Perdon is analyzing the profitability of its two products. Part of this analysis involves estimating the amount of overhead to be allocated to each product line. The following information relates to overhead. Mobile Safe Walk-In Safes Units planned for production 200 50 Material moves per product line 300 200 Purchase orders per product line 350 Direct labor hours per product line 800 1,700 450 Instructions (a) The total estimated manufacturing overhead was $260,000. Under traditional costing (which assigns overhead on the basis of direct labor hours), what amount of manufacturing overhead costs are assigned to: (1) One mobile safe? (2) One walk-in safe? (b) The total estimated manufacturing overhead of $260,000 was comprised of $160,000 for materials handling costs and $100,000 for purchasing activity costs. Under activity-based costing (ABC): (1) What amount of materials handling costs are assigned to: (a) One mobile safe? (b) One walk-in safe? (2) What amount of purchasing activity costs are assigned to: (a) One mobile safe? (b) One walk-in safe? (c) Compare the amount of overhead allocated to one mobile safe and to one walk-in safe under the traditional costing approach versus under ABC (a) Traditional Costing Traditional Costing Formula: (Total Cost / Total Hours) - $ rate per DLH (direct labor hour) (a1) ONE MOBILE safe overhead cost is: (Direct Labor Hours x Rate per DLH) then divided by ??? (a2) ONE WALK-IN safe overhead cost is: (b) Activity Based Costing Materials Handling costs: A-B-C Formula ... for Materials: (Total Material Handling Cost / Total # Moves) - $ per move (1a) ONE MOBILE safe materials cost is: (1b) ONE WALK-IN safe materials cost is: Purchasing Activity costs: A-B-C Formula for Purchasing Activites: (2a) ONE MOBILE safe purchasing activities cost is: (2b) ONE WALK-IN safe purchasing activities cost is: (c) Comparison: Traditional vs Activity-Based Costing Recap: The overhead allocated to each unit of the two products is: UNIT Costs Traditional Costing Activity Based Costing Mobile Safe Walk-in Safe