Problem 7-22 Claire Company produces Tablets and Books. Total overhead costs traditionally have been allocated on the basis of direct labor hours. After implementing activity-based costing, managers determined the following cost pools and cost drivers. They also decided that general costs should no longer be allocated to products. Department Activity Pool Cost Driver Number of units Machine hours Change orders None Costs Binding Printing Product design General $249,400 797,350 196,800 645,180 Total overhead costs $1,888,730 Other information is as follows Units Direct materials cost per unit Direct labor cost per unit Direct labor hours Machine hours Change orders Tablets Books 62,600 20,500 $10 $8 25,500 16,400 126,000 120,000 1,260 2,000 $3 $4 Claire's managers have gathered the following information about selling and administrative costs. Activity Pool Shipping Advertising Commissions Total selling and administrative costs Total Cost $307,450 159,892 166,785 $3,127 Cost Driver Pounds shipped Number of mailings 5% of sales price