Use the following information to answer questions 7-9: Hanover Manufacturing has four categories of overhead. The four categories and expected overhead costs for each category for next year are as follows: Maintenance Materials Handling Setups $ 510,000 250,000 60,000 21 Inspection 210,000 $1,030,000 Practical capacity for the four activity-based cost drivers that would be used is: Maintenance hours Materials moves Setups Quality inspections 30,000 8,000 1,500 6,000 Currently overhead is allocated using a predetermined overhead rate based upon budgeted direct labor hours. 50,000 total direct labor hours are budgeted for next year. The company has been asked to submit a bid for a proposed job. The plant manager feels that obtaining this job would result in new business in future years. Bids are based upon full manufacturing cost plus 10 percent markup. Estimates for the proposed job are as follows: Direct materials $15,000 Direct labor (2,000 hours) 12,000 Number of materials moves 25 Number of inspections 30 Number of setups 6 9. 8. Number of maintenance hours 1,000 7. If direct labor hours were used as the allocation base, the amount of overhead allocated to the proposed job would be: (a) $20,800 (b) $30,000 (c) $30,400 (d) $41,200 If direct labor hours were used as the allocation base, the total cost of the proposed job would be: (a) $53,200 (b) $56,200 (c) $68,200 (d) $72,000 If the activity-based cost drivers are used to assign overhead, the total cost of the proposed job would be: (a) $46,071.25 (e) $45,050.00 (b) $45,290.00 (d) $31,071.25