Valley View Trailmasters makes two types of tents for mountain camping, the Explorer and the Climber. Data concerning the two product lines is presented in the table below:

Only questions 5 & 6 need to be answered

OBJECTIVE: Assign indirect costs to products using activity based costing and compare results to indirect costs assigned to products using traditional volume based costing Valley View Trailmasters makes two types of tents for mountain camping, the Explorer and the Climber. Data concerning the two product lines is presented in the table below Sales price per unit Direct materials per unit Direct labor per unit EXPLORER $390 $92 $51 CLIMBER $115 $53 $12 Estimated annual production 4,000 units 9,000 units The company has always employed a tradition costing system in which manufacturing overhead is applied to units based on direct labor hours Estimated data concerning manufacturing overhead and direct labor hours for the upcoming year appear below Estimated total manufacturing overhead Estimated total machine hours $484,746 1,000 The company is considering replacing its traditional costing system with an activity based costing system that would assign its indirect product costs to four activity cost pools. Information about the amount assigned to these cost pools the identified cost driver for each and usage of the cost drivers by the two product lines is presented in the following table