Q $1.$ XYZ Manufacturing Company produces two types of products: Product A and Product B$.$ The company currently uses a traditional costing system based on direct labor hours to allocate overhead costs. However, management is considering switching to an activity$-$based costing $($ABC$)$ system. The following data is available for the company's overhead costs and activity drivers:

Overhead Costs:

$$ Total overhead costs: $$500,000$

$$ Activity $1($Setup$)$: $$200,000$

$$ Activity $2($Material handling$)$: $$300,000$

Activity Drivers:

$$ Setup hours: $5,000$ hours

$$ Material handling hours: $10,000$ hours

For Product A$,$ the following information is available:

$$ Setup hours required: $3000$ hours

$$ Material handling hours required: $4000$ hours

For Product B$,$ the following information is available:

$$ Setup hours required: $2000$ hours

$$ Material handling hours required: $6000$ hours

Calculate the overhead costs allocated to each product using the activity$-$based costing system