St. James, Inc., currently uses traditional costing procedures, applying $800,000 of overhead to products Beta and Zeta on the basis of direct labor hours. The company is considering a shift to activity-based costing and the creation of individual cost pools that will use direct labor hours (DLH), production setups (SU), and number of parts components (PC) as cost drivers. Data on the cost pools and respective driver volumes follow.

(1). The overhead cost allocated to Zeta by using traditional costing procedures would be:
(a). $240,000.
(b). $356,000.
(c). $444,000.
(d). $560,000.
Some other amount.
(2). The overhead cost allocated to Zeta by using activity-based costing procedures would be:
(a). $240,000.
(b). $356,000.
(c). $444,000.
(d). $560,000.
Some other amount.

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Cash S 6,750 Retained Eamings $22,925 Supplies 3,900 Dividends 3,425 Prepaid Insurance 8,400 Service Revenue 56,300 Equipment 41,750 Salary Expense 24,300 Accumulated Depreciation 9,950 Rent Expense 6,000 Capital Stock 6,850 Miscellaneous Expense 1,500