3. Kustom Kar Parts expects to incur $480,000 in overhead costs in its three main production...

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3. Kustom Kar Parts expects to incur $480,000 in overhead costs in its three main production departments this year: setup costs ($30,000), machining costs ($330,000), and packing costs ($120,000) to make two models of their exhaust systems. The setup department expects to perform 40 setups per year, the machining department expects to work 5,000 hours per year, and the packing department expects to pack 500 orders per year. Manufacturing information about Kustom's two exhaust system models follows: EX-1 EX-2 Total Expected Use of Cost Drivers Number of setups 20 20 40 Machining hours 1,000 4,000 5,000 Orders packed 150 350 500 Number of products 600 400 1,000 manufactured a. If Kustom Kar Parts use a traditional costing method for applying overhead costs to production, how much overhead would be assigned to Product EX-1 each year assuming the use of machining hours as an application base? b. Using Activity Based Costing, how much overhead would be assigned to Product EX-1 each year, assuming the expected use of cost drivers for EX-1? 3. Kustom Kar Parts expects to incur $480,000 in overhead costs in its three main production departments this year: setup costs ($30,000), machining costs ($330,000), and packing costs ($120,000) to make two models of their exhaust systems. The setup department expects to perform 40 setups per year, the machining department expects to work 5,000 hours per year, and the packing department expects to pack 500 orders per year. Manufacturing information about Kustom's two exhaust system models follows: EX-1 EX-2 Total Expected Use of Cost Drivers Number of setups 20 20 40 Machining hours 1,000 4,000 5,000 Orders packed 150 350 500 Number of products 600 400 1,000 manufactured a. If Kustom Kar Parts use a traditional costing method for applying overhead costs to production, how much overhead would be assigned to Product EX-1 each year assuming the use of machining hours as an application base? b. Using Activity Based Costing, how much overhead would be assigned to Product EX-1 each year, assuming the expected use of cost drivers for EX-1?