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Richard Miller has been studying his departments profitability reports for the past six months. He has just completed a managerial accounting course and is beginning to question the companys approach to allocating overhead to products based on machine hours. The current department overhead budget of $912,460 is based on 45,623 machine hours. In an initial analysis of overhead costs, Richard has identified the following activity cost pools.

Cost Pool		Expected Cost				Expected Activities
Product assembly			$	592,000		37,000	machine hours
Machine setup and calibration				229,600		4,100	setups
Product inspection				47,160		1,310	batches
Raw materials storage				43,700		230,000	pounds
			$	912,460

Richard Miller is taking the next step in his exploration of activity-based costing and wants to examine the overhead costs that would be allocated to two of the departments four products. He has gathered the following budget information about each product.

Driver Usage		Component 3F5			Component T76
Machine hours		920			11,400
Setups		40			23
Batches		15			15
Pounds of raw materials		10,000			10,000

(a) Calculate the total overhead allocated to each component under the traditional method using machine hours as the overhead application base.

		Component 3F5		Component T76
Total Overhead allocated		$enter a dollar amount		$enter a dollar amount

(b) Calculate the total overhead allocated to each component under activity-based costing. (Round overhead rates to 2 decimal places, e.g. 5.27 and round final answers to 0 decimal places, e.g. 5,275.)

		Component 3F5		Component T76
Total Overhead allocated		$enter a dollar amount rounded to 0 decimal places		$enter a dollar amount rounded to 0 decimal places

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