Richardson Electronics produces video games in three market categories: commercial, home, and miniature. Richardson has traditionally allocated overhead costs to the three products using the companywide allocation base of direct labor hours. The company recently implemented an ABC system when it installed computer-controlled assembly stations that rendered the traditional costing system ineffective. In implementing the ABC system, the company identified the following activity cost pools and cost drivers.

Category 'Unit Batch Product Facility Direct materials cost per unit Direct labor cost per hour Number of labor hours Number of machine hours Number of production orders Research and development time Number of units Square footage RICHARDSON ELECTRONICS Total Pooled Types of Costs Cost Cost Driver 360,000 indirect labor wages, supplies, depreciation, Machine hours machine maintenance 194,400 Materials handling, inventory storage, labor for setups, Number of production orders packaging, labeling and shipping, scheduling 105,600 Research and development Time spent by research department 300,000 Rent, general utilities, maintenance, admin. salaries, security Square footage Miniature Home Total Commercial 18.00 12.00 15.00 7.20 7.20 9.00 12,000 6,000 20,000 2,000 45,000 10,000 25,000 80,000 3,000 200 2,000 800 10% 20% 70% 100% 15,000 45,000 14,000 74,000 20,000 50,000 30,000 100,000