Skinner Shoes Corporation produces three brands of shoes: Brisk, Pro, and Runner. Relevant information about Skinners overhead activities, their respective costs, and their cost drivers follows:

a. Skinner currently allocates all overhead costs based on labor hours. The company produced the following numbers of pairs of shoes during the prior year: Determine the overhead cost per pair of shoes for each brand.

b. Determine the overhead cost per pair of shoes for each brand, assuming that the volume-based allocation system described in Requirement a is replaced with an activity-based costing system. Round your figures to two decimal points.

c. Explain why the per-pair overhead costs determined in Requirements a and b differ.

Overhead Costs Cost Driver Brisk Pro Runner 8.000 15 Fringe benefits ($200,000) Setups ($120,000) Packing costs ($80,000) Quality control ($200,000) Labor hours Number of setups Number of cartons Number of tests 22.000 25 1.200 200 20,000 10 1,900 80 900 120 Brisk Pro Runner 20.000 10,000 12.000