PR $5-5($LO $5\mathrm{.}1)$ Munch Lab produces and sells gourmet...

Munch Lab produces and sells gourmet gift baskets. The company currently uses traditional job$-$order costing that allocates indirect

costs based on the budgeted production of baskets. Munch Lab is considering using two$-$stage allocation to assign overhead costs

to batches of product. Management gathers the following estimates:

Budgeted MOH

Budgeted machine hours

Budgeted direct labor hours

Budgeted baskets

$$240,000$

$1,000$

$16,000$

$40,000$

Cost Pool

Machine$-$related MOH

Labor$-$related MOH

Unit$-$related MOH

Total

Total Cost

$$30,000$

$$180,000$

$$30,000$

$$240,000$

Allocation base

Machine hour

Direct labor hour

Basket

Job $314$ is an order for $10$ gift baskets. The job requires $2$ hours of labor and $15$ minutes of machine time.

Question

a$.$ Assuming that Munch Lab allocates all indirect costs on the basis of gift baskets, how much indirect cost will be

allocated to Job $314?$ Note: Round your answer to $2$ decimals.

b$.$ Assuming that Munch Lab uses two$-$stage allocation to allocate indirect costs using the three cost pools listed

above, how much indirect cost will be allocated to Job $314?$ Note: Round your answer to $2$ decimals.

c$1.$ Assuming that two$-$stage costing is more accurate than single$-$stage costing, would Job $314$ be undercosted or

overcosted using a single$-$stage costing system?

c$2.$ Assuming that two$-$stage costing is more accurate than single$-$stage costing, by how much would Job $314$ be

undercosted or overcosted using a single$-$stage costing system? Note: Round your answer to $2$ decimals.