Thakin Stairs Co. of Moore designs and builds factory-made premium wooden stairways for homes. The manufactured stairway components (spindles, risers, hangers, hand rails) permit installation of stairways of varying lengths and widths. All are of white oak wood. Budgeted manufacturing overhead costs for the year 2014 are as follows.

Overhead Cost Pools		Amount
Purchasing		$67,800
Handling materials		82,560
Production (cutting, milling, finishing)		213,000
Setting up machines		101,250
Inspecting		102,000
Inventory control (raw materials and finished goods)		136,080
Utilities		360,000
Total budget overhead costs		$1,062,690

For the last 4 years, Thakin Stairs Co. has been charging overhead to products on the basis of machine hours. For the year 2014, 100,000 machine hours are budgeted. Jeremy Nolan, owner-manager of Thakin Stairs Co., recently directed his accountant, Bill Seagren, to implement the activity-based costing system that he has repeatedly proposed. At Jeremy Nolan