Potter, Inc. manufactures two kinds of wizard figurines: Ceramic and Fancy. The Fancy product line comes with purple leather capes and a prism-headed wand. Due to the popularity of the Harry Potter books, management is considering eliminating the ceramic figurines and producing only the fancy figurines. According to Kenneth Rowling, VP of Marketing, "the kids seem to love the realism of the Fancy product line and the margins are magically delicious. This is a win-win for the company and the consumer!" The company's total budgeted production overhead is $5.017.500. Some additional budget data follow: Ceramic Fancy Total (Ceramic + Fancy) $31,800,000 $15,000,000 $16,800,000 Revenues Direct Costs: Materials Labor $8,000,000 $3,250,000 $6,335,000 $4,415,000 $14,335,000 $7,665,000 Production (units) Machine Hours Direct Labor Hours Number of Inspections 1,500,000 200,000 34,500 1,000 350,000 50,000 153,625 6,500 1,850,000 250,000 188,125 7,500 Required: A. Potter, Inc. has traditionally used machine hours to allocate overhead. Determine the total overhead allocated to each product line, Ceramic and Fancy, using traditional costing. B. The cost accountant has determined that production overhead costs can be assigned to separate cost pools. This "wizardly" idea seems eerily reminiscent of activity-based costing. . Pool #1 contains $1.260.000 of overhead costs for which the most appropriate cost driver is machine hours: . Pool #2 contains $2.257.500 of overhead costs for which the most appropriate cost driver is direct labor hours; and . Pool #3 contains $1,500,000 overhead costs for which the most appropriate cost driver is the number of inspections. Determine the revised total overhead allocated to each product line using activity based costing