Tamarisk Company produces two products: MB-R and MB-X. Currently, Tamarisk allocates overhead based on direct labour hours. Overhead is estimated at $392,000. The cost accountant realizes that there are some differences in how resources are being used in producing these two components and is considering the use of ABC to allocate overhead. She determines that overhead is caused by testing and inspections, $108,000; machine setup, $72,000; machine stamping, $160,000; and plant maintenance, $52,000. Tamarisk estimates the following activities related to the overhead costs: Activity | | Cost Driver | | MB-R | | MB-X | Testing and inspections | | Number of testing and inspections | | 360 | | 360 | Machine setup | | Number of setups | | 120 | | 80 | Machine stamping | | Number of machine hours | | 21,000 | | 11,000 | Plant maintenance | | Direct labour hours | | 1,500 | | 2,500 | | | | |