RS Company manufactures and distributes two products, R and S. Overhead costs are currently allocated using the number of units produced as the allocation base. The controller has recommended changing to an activity-based costing (ABC) system. She has collected the following information:

1.What is the total overhead allocated to Product R using the current system?

2.What is the total overhead per unit allocated to Product R using activity-based costing (ABC)?

3.What is the total overhead allocated to Product S using the current system?

Activity Production setups Material handling Packaging costs Cost Driver Amount Number of setups $82,000 Number of parts 48,000 Number of units 130,000 $260,000 R 8 56 80,000 s 12 24 50,000